These 5 Defense Stocks Are Rallying After Trump Claims NATO Funding Victory – Investor's Business Daily

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Defense stocks rallied Thursday after President Donald Trump claimed victory in his fight to get NATO allies to increase their military spending.


He said he is “happy” rich European counterparts have “upped their commitments” and will quickly increase their national spending on defense to the benchmark of 2% of national GDP. Trump also suggested it could increase to 4% of GDP in the future.

Big names including Boeing (BA), Lockheed Martin (LMT) and Raytheon (RTN) were among the winners as the stock market reacted positively to a potential sales bonanza. But defense stocks have retreated in recent months.

Boeing Stock

Boeing stock rose 1.3% to 345.03 on the stock market today. Boeing, though primarily a civilian aerospace giant, is the second-largest defense contractor in the world. The Dow Jones component makes a range of fighter jets, bombers, attack helicopters and other aircraft. Boeing makes the F/A-18F Super Hornet fighter.

Boeing stock flashed a sell signal after a breakout from a 14-week cup with handle base failed, MarketSmith analysis shows. The stock has been moving higher in July, but has been finding resistance at its 50-day line, a key technical support However Boeing stock is worth keeping an eye on. It’s likely to have a flat base with a 374.58 buy point after this week.

Lockheed Martin Stock

Lockheed Martin stock popped 2% to 312.75. The Bethesda, Maryland is a leading manufacturer of fighter jets, missiles, air traffic control systems and electronic warfare systems.

Lockheed  is sure to be one of the big winners from increased military spending. Lockheed has just been given another boost, as it is is planning to double production of its most advanced Patriot missiles in the coming years according to Defense News. This is due to an explosion in orders for the weapon from the U.S. Army and its allies. However U.K. Prime Minister Theresa May reportedly is mulling cutting the country’s commitment to take 138 of the Lockheed’s F-35 fighter jets to help fund other military programs.

Lockheed stock was able to retake its 50-day line on the back of the news, and could power upwards after recent weeks of downward momentum following its Q1 earnings report. However the recovery has come on below-average volume, and the relative strength line remains below its high for the year.

Raytheon Stock

Raytheon rose 1.6% to 197.07. It is the world’s largest producer of guided missiles, and also manufactures missile defense systems, satellite sensors and air warfare simulators.

Raytheon stock is currently trading below both its 50 and 200-day lines. Despite its recent downtrend the stock is still up by 4.9% so far this year.

The company currently has disappointing fundamentals, which is reflected in its woeful IBD Composite Rating of 29. Its Relative Strength Rating of 48 is also poor.

Northrop Grumman Stock

Shares in Northrop Grumman rose 2.8% to 320.41. The company manufactures military vessels, missile defense systems, satellites and military aircraft. Its most famous product is the B-2 Stealth Bomber, which is still in service.

Northrop stock has been mired in a consolidation period for the past 14 weeks. However it was able to retake both its 50 and 200-day lines on Thursday’s action.

General Dynamics Stock

General Dynamics shares climbed 0.9% to 193.21. The company is the world’s fifth-largest defense contractor and its activities include communications systems, command and control, IT systems, combat vehicles and fighter jets.

General Dynamics stock remains marooned far below both its 50 and 200-day lines. In addition, its stock price has fallen by 16% from a recent high of 229.75 back on April 24.


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