Lockheed Martin Corp. (LMT) was reviewed on a rough down day in early April where I said candidly, "The NYSE is open from 9:30 to 4:00. A very long day when prices are falling. I want to repeat my advice for traders to use a $324 sell stop and investors a stop just below the 200-day average line."
Prices managed to stage a reversal that day and had carryover buying the next two weeks.
LMT got back to its January and February peaks and then on this Tuesday those gains were quickly erased. Yesterday LMT made a new low for the move down breaking the lows since February and testing the rising 200-day moving average line. Now what?
In this daily bar chart of LMT, below, we can see that prices just touched the rising 200-day moving average line. The slope of the shorter 50-day line is turning bearish.
Volume was heavy and the daily On-Balance-Volume (OBV) line looks like it has turned down. The Moving Average Convergence Divergence (MACD) oscillator quickly changed from a buy to a sell.
In this weekly bar chart of LMT, below, we can see how prices tested the rising 40-week moving average line and the week is not over yet.
The weekly OBV line looks like it is making a lower high and the MACD oscillator is still in a bearish mode after the take profits sell signal in February.
In this Point and Figure chart of LMT, below, we can see a triple top at $358.69. The recent break below $327.97 opens the way for a downside price target of $281.
Bottom line: A lot of price damage has been done to the charts of LMT. Is it an "overreaction"? Maybe but our $234 sell stop was hit and I would be out. LMT will now have to prove to me that it is worthy of repurchase.