Defense technology leader Raytheon (RTN) has already made significant price gains in the past year. The trend remains up and the charts and indicators suggest there are still higher price targets achieve in the months ahead. Let's check the charts and indicators ahead of tonight's address to Congress.
In this one-year daily bar chart of RTN, above, we can see a steady uptrend from $120 with relatively shallow corrections. There is a successful test of the rising 200-day moving average line in early November and prices are currently above the rising 50-day simple moving average line.
The On-Balance-Volume (OBV) line also makes a smooth advance, the past 12 months confirming the rally. In the lower panel is the 12-day momentum study, and there are no bearish divergences between the price action and the rate of acceleration of the rally to flash a warning of a correction.
In this three-year weekly chart of RTN, above, we can see a sideways-to-higher trading range from 2014 into 2015 and then the uptrend gets underway in earnest. Prices have stayed above the rising 40-week moving average line for well over a year.
The weekly OBV line has been moving up since early 2016, telling us that buyers of RTN have been more aggressive, with heavier volume of trading being done on weeks that RTN has closed higher.
The weekly Moving Average Convergence Divergence (MACD) oscillator has been above the zero line (bullish) for much of the past three years, which is a very bullish statement.
In this Point and Figure chart of RTN, above, we can see the strong uptrend displayed in a different way. The chart entry at $152 is a triple top breakout and allows us to "count" the columns of Xs and Os across the consolidation and then project them upwards for a potential price target. The target is $185 and also represents a double from the large consolidation pattern in 2014 and early 2015.
Bottom line -- RTN is in a strong uptrend and may not dip all that much, so you may have to buy strength. If there is any pullback, support is likely to be encountered around $150. Traders should risk below $145 and investors should risk below $140; $185 and maybe $200 could be seen by mid-year.