What are Jim Cramer's thoughts on L3Harris Technologies Inc. (LHX) as it moves down?
"This is my favorite of the defense names and it's coming down for no reason," Cramer told a caller during the "Mad Money" on Wednesday night. Let's check the charts of LHX.
In this daily bar chart of LHX, below, we can see that prices stalled out in August and September, before declining in October and into the beginning of November. Prices are below the declining 50-day moving average line, but above the rising 200-day line.
Trading volume looks like it has increased in the past two weeks, suggesting that investors are voting with their feet. The daily On-Balance-Volume (OBV) line has been working lower since August, telling us that sellers of LHX have been more aggressive. The 12-day price momentum study in the lower panel is showing equal-to-higher lows since early October, which is a bullish divergence when compared to the price action making lower lows. This bullish divergence between price and the indicator movement could foreshadow higher prices in the period ahead.
In this weekly bar chart of LHX, below, we see a mixed picture. Prices are above the rising 40-week moving average line and the weekly OBV line has been in a positive trend this year. The Moving Average Convergence Divergence (MACD) oscillator is in a take-profits, sell signal but still nicely above the zero-line.
In this Point and Figure chart of LHX, below, we used weekly close only price data to construct the chart. Here a $237 price target is indicated.
Bottom line strategy: The technical signals on LHX are not super strong, but with a strong tape for the broad market even some green shoots can translate into good rallies. Traders should be ready to buy LHX and a close back above $200 should be your signal to go long.
