As a reminder, when it comes a stock hitting a 52-week high, I prefer to look for ones hitting a “new” high. In my view that would be a stock that hasn’t hit a new 52-week high in quite some time. In addition, and more importantly, I want the stock to have broken through a key area of resistance. This way I know that it wasn’t just any move higher, it was an important breakout.
Spirit AeroSystems Holdings, Inc., through its subsidiaries, designs and manufactures commercial aerostructures in the United States and internationally. It operates in three segments: Fuselage Systems, Propulsion Systems, and Wing Systems. The Fuselage Systems segment develops, produces, and markets forward, mid, and rear fuselage sections and systems primarily to aircraft original equipment manufacturers. This segment also offers rotorcraft comprising forward cockpit and cabin. The Propulsion Systems segment engages in the development, production, and marketing of struts/pylons; nacelles, including thrust reversers; and related engine structural components primarily to aircraft or engine OEMs, as well as provides related spares and MRO services. The Wing Systems segment develops, produces, and markets wings and wing components comprising flight control surfaces. This segment also provides low observables that are radar absorbent and translucent materials; radome new builds and refurbishment; and other military services comprising fabrication, bonding, assembly, testing, tooling, processing, engineering analysis, and training. Spirit AeroSystems Holdings, Inc. serves large commercial airplanes, business and regional jets, and military/helicopter sectors of the aerostructures industry.
To review Spirit’s stock, please take a look at the 1-year chart of SPR (Spirit AeroSystems Holdings, Inc.) below with my added notations:
SPR has been trading sideways from the beginning of the year until the present while running into a $26 resistance (red). The $26 level is a clear resistance level that would signify an important 52-week high breakout if SPR could manage to break above it. IF that were to happen, the stock should probably be heading higher overall. You will also notice the lower levels of $24 (blue) and $22 (green) that could become significant if SPR pulls back instead.
The Tale of the Tape: SPR has formed a key resistance level at $26, which would be a 52-week high breakout if the stock can break above it. A long trade could be entered if SPR breaks above $26, or pulls back to $22, with a stop set below the level of entry.
Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.
No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!
Christian Tharp, CMT