Raytheon (RTN) broke out to the upside from an 11-month consolidation earlier this month. RTN looks great, but it is extended so we would rather look for a pullback to buy.
In the chart of RTN above, we can see the upside breakout this month as RTN broke out over the March and August highs. The 50-day simple moving average has had a positive slope since August and the On-Balance-Volume (OBV) line has been erratic for much of the past two months.
In this longer-term chart of RTN, we see how successful the 40-week moving average would have been with giving buy signals for RTN. Also, the OBV has been moving steadily higher on this time frame. So with RTN, we have a great-looking long-term chart, but we have had a steep rally in the short run. Traders should look to buy a dip toward $115 or better, if available.
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I will have to give some of my favorite tech names a haircut in the name of balance. Hopefully everyone gained some exposure to gold.
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