The last time we looked at Northrop Grumman Corporation (NYSE:NOC) we noticed that it began to test upon this major trend line that we set up from the previous highs of last year. The current chart that you see posted above is the same image from the last time we looked at NOC as I have not adjusted any of the trend lines or the overall Fibonacci retracement that is drawn on the larger time scale.
We notice that we had same major pushes up side breaking that major trend line and immediately come back to test again the zone previously drawn almost exactly. Once the zone was retested and continue to push up we can now look for the confirmation of the new highs for the year once we see price break the current resistance level that it is sitting at.
The projected price level for the stock remains optimistic as Analyst from various companies are aiming for price to head back toward the $315 level. Overall the stock performs very well compared to others in its industry. Fundamentals are strong and in support of growth.
Be aware that news was released aftermarket that could potentially greatly affect the market. We will have to see how the market plays out following the News
Lockheed, Northrop snare $1.2B of defense work for F-35s, Hellfire missiles, Advanced Hawkeye
Matthew RichardsonAmerican City Business Journals•May 2, 2019
There are many different directions that one could potentially trade this market although I would be cautious as it is sitting in a major zone of consolidation and we need price to make a major push in either direction before confirming any trends.
Price could very easily reject the new highs and drop back down to retest some of the support lines previously drawn if there is not enough volume to support to drive up. On the same token being able to see price simply take a step back to retest the major trend line before bouncing up to new highs is very likely. NOC has shown incredible strength with their market growing with greater international projects.
For the short term basis I would play your cards safe with some options trading trying to secure in some small profits while price plays within the current price range to be able to draw in some income. Until we see confirmation to either side play this stock on the defensive side keeping a close eye on any news that could potentially cause the price to react.
As always please consult your financial adviser before many any investments that you are unsure about. Keep in mind that I am not advising you in any way to trade NOC but I am simply opening a conversation regarding their technicals and fundamentals and sharing my input on the stock and how I am planning on approaching the market.
I invite you to converse and share your own ideas and opinions regarding any investing topics I write about. I am not a legal financial adviser nor am I acting as one. I simply enjoy having valuable conversations regarding various investments which I am familiar with ranging from stocks, Forex, to aviation related business. Happy Trading