Northrop Grumman Corporation provides systems, products, and solutions in aerospace, electronics, information systems, and technical service areas to government and commercial customers worldwide. The company’s Aerospace Systems segment designs, develops, integrates, and produces manned aircraft, unmanned systems, spacecraft, high-energy laser systems, microelectronics, and other systems and subsystems. Its Electronic Systems segment offers solutions for sensing, understanding, anticipating, and controlling operating environment to military, civil, and commercial customers. The company’s Information Systems segment offers advanced solutions for Department of Defense, national intelligence, federal civilian and state agencies, and commercial and international customers. Its Technical Services segment provides logistics, modernization, and sustainment support.
To review Northrop’s stock, please take a look at the 1-year chart of NOC (Northrop Grumman Corporation) below with my added notations:
NOC has formed a solid resistance at $125 (blue), which would also be a 52-week high breakout if the stock could manage to close above it. In addition, the stock has been climbing a trendline of support (green). These two levels combined have NOC coiled within a common chart pattern known as an ascending triangle. At some point, the stock will eventually have to break one of those two levels.
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The Tale of the Tape: NOC has an up trending support and a 52-week resistance level to watch. A long trade could be made on a close above the $125 resistance. A break below the up trending support could be an opportunity to enter a short trade.
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
Follow me on Twitter: @cmtstockcoach