Skimming over some charts last evening, Raytheon Technologies (RTX) got my attention. The last time I reviewed RTX was last year on October 28 where I wrote that "Markets are discounting mechanisms so it is never a good sign when a stock declines on what appear to be good earnings' numbers. RTX is technically weak. Avoid the long side."
Let's pay RTX another visit.
In this updated daily bar chart of RTX, below, we can see that prices finished out the month of October very weak but staged a sharp and strong reversal in November. As we moved through the month prices suddenly gapped above the 50-day and 200-day moving averages. Prices eventually pulled back in December and January but then the advance resumed.
RTX is trading above the rising 50-day moving average line as well as the rising 200-day line. A bullish golden cross buy signal can be seen in early December.
The On-Balance-Volume (OBV) line changed from a downtrend to an uptrend in late October. The Moving Average Convergence Divergence (MACD) oscillator turned bullish in November and is now poised to cross upwards to a fresh outright buy signal.
In this weekly bar chart of RTX, below, we see a positive picture. Prices are in an uptrend above the rising 40-week moving average line. Trading volume has been active the past 12 months.
The weekly OBV line is not in an uptrend but it does show a pattern of strength. The MACD oscillator is in a bullish alignment above the zero line.
In this daily Point and Figure chart of RTX, below, we can see a price target in the $86-$87 area.
In this weekly Point and Figure chart of RTX, below, we see that the software is projecting a potential price target in the $101 area.
Bottom line strategy: The charts of RTX are bullish. Traders could go long closer to $80 if available. Risk to $73. The $101 area is our first price target.
