Back in the winter when the Ukraine War started, defense stocks like Lockheed Martin (LMT) soared up the relative strength rankings. In the SIA S&P 100 Index Report, LMT ran up from the red zone to the green zone and remained relatively strong through the spring. This month, however, LMT’s relative strength has weakened dramatically with the stock diving down into the lower half of the Yellow Neutral Zone. Yesterday, LMT fell 10 positions to 47th spot, and it is down 22 places in the last month.
Since their big rally peaked back in April, Lockheed Martin (LMT) shares have been under distribution, declining in a bearish Falling Channel of lower highs and lower lows. This week, the shares have confirmed their downturn and the start of a new downtrend with a breakdown below $400.00, a round number and a previous breakout point.
Initial resistance now drops to $400.00 from $425.00 based on another reversal of polarity. Next potential downside support tests appear near $360.00 and then $325.00 based on previous swing peaks and troughs.
The recent rally in Lockheed Martin (LMT) continues to unravel. A winter spike topped out in April and the shares spent the spring trending sideways in what looked like consolidation of the previous rally. The first negative signal was a lower high in June, but the more decisive downturn came this month with a bearish Triple Bottom breakdown that has extended into a bearish Low Pole.
Based on horizontal counts and previous column highs/lows, next potential downside support tests appear near $342.40 and $316.30 on trend. Initial resistance appears near $425.75 based on a 3-box reversal and a retest of the recent breakdown point.
With its bullish SMAX score dropping to the borderline 6, LMT is still exhibiting strength against the asset classes for now but any further declines would tip it into bearish territory.
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