Just earlier this week we took a look at Northrop Grumman Corporation (NYSE: NOC) and noticed the news stories that were surrounding the company. They had just signed a contract for $3.2 B with the U.S. Navy for E-2D Advanced Hawkeye tactical Airborne Early Warning Aircraft.
The contract to be dispersed 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.
If you have not read the initial analysis go back and read that before going any farther!
We all had a few ideas of what the news would bring to price and if the news of the contracts would be in favor of investors and continue to bring price to old highs that were once present weeks back. Although the news was an optimistic one we can see now that it was an immediate trap in the market. The news was released on Fridays shortly before the market closes and allows those who had insight on the news to secure gains on the move before the end of the week.
With the new week starting we can see it rejecting on a major trend line based of a 3 hour chart. Since our last conversation price has dropped a total of 2% bringing us right back to the initial price point we were at just earlier last week. Although to the untrained eye it may seem like no progress has been made there is a lot to take in and understand about the current market.
For starters there is a lot of uncertainty and confusion when it comes to the news. We can all understand that the media has one mission when it comes to investing. They aim to confuse you and misguide you as much and as long as possible while the institution and banks reap the benefits of a misguided public. Being able to understand technical analysis is the key basics when it comes to be able to trade the market in an effective manner.
I personally would love to see NOC test down to the trend lines drawn below before making any pushes up again. I believe the current area that it is sitting in is a major point of resistance and that before any breaks of the trend line occur some consolidation will first occur.
The difference between Trading and Investing
There is a key difference between trading and investing that many individuals often confuse. The two words are not synonymous and are used in vary different environments.
See an investor might be upset that Northrop Grumman (NYSE: NOC) is dropping this week and is seeing their capitol loose value and can then become quite emotional. Then due to the psychology of investing they will conduct research and ask for reassurance that their investment will return profits and they continue to sit on the side lines and allow those in control to move the stock price at their will leaving the investor at the mercy of the market.
When you are actively trading you stay vigilant and alert. You understand that the market moves either up, down, or sideways and you prepare yourself with skills and tools to be able to profit from the market in which ever direction the market leads.
Be an Active Trader!
An active trader is able to dominate in any kind of market being that they understand the core fundamental and technical rules that apply and how to interpret them. They understand how to be able to correct and adjust trades actively and monitor when to close poor trades.
Being a trader is not the easiest of skills as it can require intense focus and dedication towards understanding the core market concepts. Once they are developed and practice then the rewards to follow will be astronomically greater than the individual who simply invests passively and is not active in ensuring they are receiving the greatest return on their investment.
How to gain a Trader’s Edge?
To become a trader is just like any other craft or skill that takes time and dedication to gain proficiency in. The product of becoming a skilled trader is being able to take control of your own wealth building skills. This is certainly a skill that I am still in the process of perfecting but I am passionate on constantly educating myself in how to become more accurate and efficient in my trading process.
Think in the mind of a Hunter and Gather. There once was a time where one would manually need to throw a spike at fleeing animal in hopes of making impact to then provide supplies for their tribe. As advances were made to the Bow and Arrow now accuracy and efficiency has increased dramatically with the speed and power of the bow.
The financial market world is experiencing the same kind of revolution in terms of technology advancing the method of which individuals trade and invest in the market. Where before we needed to wait till the weekly issue of Barron’s to be released in today’s world market information can be reached within seconds on your cell-phone. There are now tools created that are designed to save you hours of time and hard work as they design proper entry points and exit points that are catered toward your own trading style.
Lets face it, as humans we tend to be lazy, we can make mistakes, we can be forgetful or simply distracted with the other aspects of life that for us to be the best traders around we would need to devote decades of hard work towards being able to gain a desired level of proficiency. Technology is playing a major role in being able to compress that time exponentially through the introduction of specially designed software and tools to best prepare a trader to be able to approach the market.
Gather the Tools for the Job
Understanding the access that you and I have with it comes to the tools and information that we have available to trade the market effectively is incredible and something to certainly not take for granted. We are in the generation where investing is becoming more popular than ever before. With the internet now there are 16 year old kids who can investing at the same level as those sitting on wall-street.
I am going to put an invitation below to some trading tools and software that I use myself. The link is only going to be up for a limited time as I strongly believe procrastination is the killer of hopes and dreams. I believe that if you really are passionate about being able to learn how to trade the market in various different trends, and that you are seeking for guidance in terms of how to refine the skills you already have or are looking for a place to start these tools can best equip you for the future ahead.
If you have any questions regarding Northrop Grumman or some of the trading tools that I use, feel welcome to email me or leave a comment on this post and I will get back to you within 48hrs.