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BA Technical thoughts- Link to CNBC interview. and short-term Technical thoughts on RTN, NOC, HRS, LMT, GD

My CNBC interview from last week, talking BA technicals

https://t.co/7CBjkBp4XP

 

 

Tariffs look to put further pressure on the Aerospace/Defense group .     In the short run, BA is unattractive at current levels technically and looks to have begun a short-term correction which started in the last week

Further downside likely over the next 4-6 weeks, with pullbacks down to 336 technically, and max downside near 311 which marked late March intra-day lows and lies just above its 200-day ma

 

Negatives Technically- 

  • Bearish momentum divergence after reaching the most overbought levels in over 30 years  -  RSI (Relative strength index reached 92) and has since diverged negatively)
  • BA broke a one-month uptrend after having tested former highs from late February just above 370

 

Long-term

The stock remains in a longer-term uptrend.. and until we see more signs of intermediate-term trend damage, breaking long-term uptrends.. 1 yr trend intersects 336,  its right to buy dips from a trading perspective as this gets down to 336, 311

 

       Tripling since early 2016 has made this very overbought..  and now has consolidated for 4 straight months-  NEUTRAL-  but slowly but surely losing momentum..

  • EVERY TIME this has gotten this overbought.  RSI over 75 on monthly..  it’s gone nowhere or down-   with 5 of the prior six occasions losing nearly 50% in 2006, 2000 1996 1990 and 1986
  • 2013- sideways for 4 years. 
  • 2006-   Lost 50% in 3 year-
  • 2000-  lost 70-% in 3 years
  • 1996-   lost 50 % over 2 years
  • 1990..  lost 50% over 2 years
  • 1986..  Lost nearly 50% into late 1987

 

 

BA-  See the one month trend break just after BA had tested prior highs-   Trend choppy from January.. neutral.. but short-term negative down to 335-6

UNDER 311 would be a larger concern and result in likely the kind of returns mentioned above over the next 2-3 years.  For now..   premature, but an increasing likelihood

 

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BA-  MONTHLY has gotten to the most overbought that we’ve seen since the early 1980s.   RSI hit 92 back in February and then has diverged since then on the retest into early June

See the prior 5 occasions that BA had RSI over 75.. and the subsequent performance

 

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AEROSPACE & DEFENSE-   Further weakness likely

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RTN-  202-  downside to 197 likely.  Under would lead to 186 and a larger break of the 2-year uptrend.   Doubtful that today’s minor bounce attempt is all that constructive.  And additional weakness likely

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NOC-  Area to buy lies near 312-  For now.  Additional weakness likely this week and a stock to hold off on buying too aggressively

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LMT-  Weaker stock-  Has already broken 2 yr trend.. Pullback to down near 300 likely

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HRS-  Still well above longer-term trend-  but has potential to weaken to low 140s

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GD-  Arguably has already broken down..  But sitting near lows from the last 6-8 months that should be important.   191-2.   Under would allow for pullback to 188, then 175