Lockheed Martin Corp. (LMT) was reviewed near the end of April and I wrote that, "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." Here we are not quite three months later and LMT has not yet given us enough confidence to reenter the long side. Let's look closer.
In this daily bar chart of LMT, below, we can see that prices made a low in early May and then rebounded about $30. Prices could not break above the declining 50-day moving average lien and in June they sank to new lows. Prices rallied this month but have stopped short of the flattening 200-day moving average line. The level of trading volume in July looks like it is slower than in June so that is not encouraging to bulls. The daily On-Balance-Volume (OBV) line has come up from its late June low but it is still short of a new high. The Moving Average Convergence Divergence (MACD) oscillator crossed to the upside earlier this month for a cover shorts buy signal. This indicator has not crossed the zero line for an outright go long signal.
In this daily candlestick chart of LMT, below, we can see the gravestone doji of yesterday and the bearish confirmation today.
In this weekly bar chart of LMT, below, we have mostly bearish signals. Prices are below the declining 40-week moving average line. The weekly OBV line has been in a decline since late January and only shows a slight improvement in recent weeks. The weekly MACD oscillator has begun to narrow but it is still short of a crossover and cover shorts signal.
In this Point and Figure chart of LMT, below, we can see a downside price target of around $282.
Bottom line: LMT could surprise me on the upside with a rally and close above $330 but right now it looks like prices have just made another rally within a downtrend and we could see LMT drift back down to around $300.