For his second Executive Decision segment of "Mad Money" Monday, Jim Cramer spoke with Bill Brown, chairman and CEO of L3Harris Technologies (LHX) , a defense contractor specilailzing in communication and electronic systems.
Brown said a strong national defense is in everyone's interest, no matter who is in the White House. Our nation is pivoting on technology, he said, and that's why L3Harris' technologies for communications, artificial intelligence and space systems are so in demand. None of that will change under a Biden administration, he said.
Brown said L3Harris continues to make investments in research and development, capital spending and hiring, but it still generates enough free cash to boost its dividend and buy back stock to reward shareholders.
We looked at LHX back in June 12 and wrote, "Until I see the OBV line turn up strongly telling me that buyers of LHX are being more aggressive, I will recommend deferring new long positions."
Let's check out the charts again
In this daily bar chart of LHX, below, we can see that prices have not improved from early June. Prices just closed slightly above the declining 200-day moving average line Monday and are also above the bottoming 50-day moving average line. The trading volume shows a pick-up in late October into November and that is mildly encouraging. The On-Balance-Volume (OBV) line was weak back in June and continued to weaken into late October. A declining OBV line tells us that sellers of LHX have been more aggressive, with heavier trading volume transacted on days when the stock closed lower. The trend-following Moving Average Convergence Divergence (MACD) oscillator fell below the zero line in late September for a sell signal but it has recently moved back to the zero line and could generate a buy signal soon.