Raytheon (RTN) was praised by Jim Cramer during his Friday "Mad Money" program when a caller asked about the Massachusetts-based defense company.
"I like Raytheon," said Cramer during the "Lightning Round" segment of show. Let's check out the charts and indicators of RTN.
In this daily bar chart of RTN, below, we can see that prices shed about $100 in just a few weeks. RTN did manage a bounce on the way down but quickly failed at the underside of the declining 200-day moving average line. The daily On-Balance-Volume (OBV) line turned lower from late January telling us that sellers become more aggressive early. The 12-day price momentum study has made lower lows recently which means that the pace of the decline has not slowed yet and there is no bullish divergence to suggest we will have a rebound. A rebound could happen because prices are so extended on the downside.
In this weekly bar chart of RTN, below, we see a bearish picture at this juncture. Prices are well below the 40-week moving average line. The late 2018 low has been broken. The weekly OBV line shows weakness from the beginning of the year and 12-week momentum study has not slowed yet.
In this first Point and Figure chart of RTN, below, we used daily price data. A target of $170 has been reached and exceeded.
In this second Point and Figure chart of RTN, below, we used weekly price data. A price target around $30 is being projected. Too bearish in my opinion.
Bottom line strategy: The price of RTN has made a "life altering" decline in my opinion. Prices could be at an extreme low, but that does not mean I want to be a buyer. "V" bottoms do happen, but I have never been comfortable buying them. I prefer to see a base pattern even if I miss opportunities.
