The Northrop Grumman Corporation (NYSE: NOC) has seen incredible growth over the progression of Q1 and we can expect to see price continue upwards in the bullish trend that it is currently in. Having it a major support level in December at $230 a share only to bounce and move up a massive 30% before testing at previous resistance. Price took a pullback and tested the 38.20% retracement level on the Fibonacci three times before starting its climb once again.
The fair value for Northrop Grumman remains optimistic holding between $316-$324 leaving 15% growths still available on the table based on the current price level. The MACD indicator for NYSE: NOC is still in below the center line leaving plenty of space for it to continue its current trend into new highs for the year.
The next major price level that we are looking at is $292.00 where it faced previous rejection in the beginning of March. If price continues to move up to test and break through the major price resistance than one would expect to see it continue to rise with the bullish trend.
Understand what is causing this rise is key in developing a trading strategy for this stock. Although the current trend is supporting a major push to continue bringing price to new highs for the year the overall weekly trend shows a strong trend line that price is currently meeting and it is essential for price to push back the current level before seeing any major gains towards new highs.
On April 10th 2019 the U.S. Navy awarded Northrop Grumman a $3.2B contract for E-2D Advanced Hawkeye tactical Airborne Early Warning Aircraft. The contract to be dispered over multiple years provides the funding for a total of 24 full-rate production aircraft. A majority of the work will be conducted in Melbourne,Fl., St. Augustine, Fl., and Syracuse, N.Y., and is planned to be completed in August 2026.
Having been a key player in military aviation NYSE: NOC can expect the see progress in their aviation department with the new contract through the Navy. This is bringing in new cash flow into the business that will only drive price higher if the proper spending of the money is maintained.
Having a large influence in aerospace technology we can expect to see new systems of software to be development for the completion of these programs. This will in the end only aid them in being able to secure future contracts as they have a strong understanding of the value they bring to the market through their advanced technology. They have been known most for the B-2 bomber for being an aircraft beyond its time. Still to this day Northrop Grumman aims to be a global leader in bringing world-class capabilities in the products they create.
Being focused in designing unique systems with advanced capabilities, strategic air maneuverability design, flight controls that best suit the pilot, intelligent missile systems, and most importantly network-enabling technologies, Northrop Grumman ensures to stand their ground on the value their provide.
Under the Sea
Northrop Grumman although having a massive history of being a key player in avaiation also plays significant roles in various other markets which in result only helps define why their stock price will continue to rise as the year progresses. The Defense Advanced Research Projects Agency is an agency of the United States Department of Defense responsible for the development of emerging technologies for use by the military.
They have recently selected NOC to create a system to be be able to use undersea organisms to assist in passively detecting and tracking undersea threats. Although the details to the project as confidential and still under the works of development the company will be developing biological sensing hardware that has increase sensitivity for certain sensor modalities achieving greater range.
The use of Artificial intelligence is going to be the cornerstone toward how this project will be accomplished. Having experience in this industry through aviation allows them to be a player in various markets.
NYSE:NOC closed on Friday seeing a spike in volume and price during the last minutes of the market. Insider Trades are currently looking bullish as over the last 3 months we have seen an increase in shares being sold. This could primarily be due to the overall uncertainty with the U.S. Market in general.
Although with any stock seeing insider selling is never a positive sign. With the average trading volume being at only 944,630 it is lower than its previous averages so before we can see any major movements look to ensure that volume is present to support the move. The Stock is over-performing currently in comparison to others in its same market which is a positive sign for growth regardless of current market trends.
If you are holding shares of NOC already take into consideration possible selling some calls on your position to start bringing in extra revenue. I would suggests educating yourself a bit more in the risk and details of how options trading works before going out and making any investment decisions and in now way shape or form am I advising you on how to handle your positions. I am simply addressing some factors in the current market and bringing to your attention some possible outcomes towards how the price of Northrop Grumman Corporation may move towards in the following weeks.
Lets keep on eye on how the week plays out. I personally will be looking into making some options spreads to be able to manage my risk while trading this stock during this following week. If you are a new investor or veteran having risk management is key. Understanding not only what the potential profits are but also the potential losses in a worse case scenario will help determine the suitability of the trade for your trading style.
I will not recommend entering any trade blind off of someone else signal or suggestion. Always test and retest strategies prior to implementing them to ensure you understand how the strategy works and how to be able to adjust the trade in case it does not go your way.
Keep Northrop Grumman on your watch-list this week to see how the stock reacts to the increase of cash flow. Follow me on stock twits for more current and up to date ideas on the stock. As always use the countless resources available online to best prepare you for the journey ahead, if you have any questions or would like to get more details on how I break down my analysis click the link below to Participate in the Trading Movement.