Lockheed Martin (LMT) was cut to "hold" by Vertical Research on Friday. Let's check out the charts of this key defense contractor.
In this daily bar chart of LMT, below, I can see a chart that has become stalled. Prices rallied sharply in October but then turned sideways from November. LMT has broken below the rising 50-day moving average line by moving sideways. The slower-to-react 200-day moving average line is still in an upward path and intersects around $440.
The On-Balance-Volume (OBV) moved up in October and then slowed in November before stalling in December. LMT needs more aggressive buying to continue to see price gains. The Moving Average Convergence Divergence (MACD) oscillator crossed to the downside in November and is now just slightly above the zero line.
In this weekly Japanese candlestick chart of LMT, below, I see a less than robust picture. Prices have formed a number of long-legged doji in December telling me that traders are in a balance between bulls and bears.
The OBV line is showing a short-term peak in November. The slope of the 40-week moving average line is positive but this is a lagging indicator. The MACD oscillator is above the zero line but has narrowed in recent weeks as the trend strength is fading.
In this daily Point and Figure chart of LMT, below, I can see that the software is projecting a possible downside price target in the $453 area.
In this weekly Point and Figure chart of LMT, below, the same $453 downside price target is shown as the daily chart.
Bottom line strategy: In the long-term the price of LMT could go higher but I like to take trading and investing one step at a time. The next step on LMT looks to be lower. Avoid the long side of LMT for now.
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