LMT Stock: Consistently Bullish
On October 13, my report on Lockheed Martin Corporation (NYSE:LMT) stock was published, in which I had explained why I believe an opportunity was presenting itself in LMT stock.
The reasoning behind that view was actually quite simple. The 200-day moving average had served as a level of support since 2012, and any time Lockheed Martin stock tested this level, it proved itself to be an opportunity to acquire LMT stock.
The reason why I like LMT stock in the first place is that I love the price chart. It is well defined, and there is little left open to interpretation. Lockheed Martin is consistent in both its performance and how it reacts to technical levels and indicators. The trend is relentless, as the trek toward higher prices continues.
Lockheed Martin stock was trading at $233.00 in my last report and, on Tuesday, it was trading at $267.24. The opportunity I described did present itself, and LMT stock is once again making new all-time highs. The trend toward higher prices is set to continue as a new technical signal supports this view.
The following Lockheed Martin stock chart illustrates the new bullish development.
Chart courtesy of StockCharts.com
The 40-week moving average is the equivalent of the the 200-day moving average. This line is the dividing line between stocks trading in a bull market versus stocks trading in a bear market. When a share price is above the moving average, it is bullish. When a share price is below the moving average, it is bearish.
The 40-week moving average has become a level of support as Lockheed Martin stock trends higher. Using this moving average has been an effective strategy to accumulate LMT stock when this trend line is being tested.
Shortly after Lockheed Martin stock successfully tested the 200-day moving average, a bullish moving average convergence/divergence (MACD) cross was generated. MACD is a simple and effective trend-following momentum indicator. Signal-line crossings are used to distinguish between bullish and bearish signals. This signal indicates which camp is now in control of LMT stock, and a bullish cross means that the bulls are now in control.
The preceding rally off of the February lows was fueled by such a signal, and I do not believe that this time will be any different. Lockheed Martin is very consistent in this regard.
The following Lockheed Martin stock chart illustrates the long-term trend.
Chart courtesy of StockCharts.com
The Lockheed Martin stock chart above illustrates a trend that is 34 years old, and still shows no signs of abating. I wish all investments had charts like this. It would make investing a much easier endeavor.
The pattern that makes up this trend is an ascending channel. There are two identical parallel lines that define this trend. These two trend lines define the upper and lower bounds, and the share price oscillates between these two lines for as long as time permits.
Lockheed Martin stock has constantly bounced off of each of these levels of support and resistance. Each and every rally or sell-off was halted in its tracks when these levels were attained, and a trend reversal soon followed. It has been approximately 20 years since the upper bound has been tested, so perhaps that is the next plausible price objective.
I can only speculate where LMT stock is going next, but the trend is straightforward. The long-term trend is up and there is nothing I have seen that would suggest that this incredible pursuit of higher prices will end anytime soon.
Bottom Line on Lockheed Martin Stock
I am bullish on Lockheed Martin stock because, as an investment, I can only expect much of the same as LMT stock continues to trade according to old habits and the trend higher continues. Consistency is a trait that investors and traders alike look for in a possible investment.