Momentum, Growth and Innovation: RHM

We have just added a new position (RHM) to our 'Growth, Momentum and Innovation' portfolio with 11% of total equity.

Here is the link to our updated portfolio, which is up > 18% in the last month:

Technical Analysis According to Minervini’s Principles

Trend: Rheinmetall's stock should be evaluated against the major moving averages. Minervini looks for stocks trading above their 50-day and 200-day moving averages to indicate an overall uptrend. If RHM is above these averages and they are sloped upwards, it aligns with Minervini’s criteria for a bullish trend.

Price Action: Minervini favors tight price action and volatility contraction. It's key to look for lower volatility and tighter price consolidation before the breakout. This can be seen in the narrowing of the Bollinger Bands or a decrease in daily price range. If your entry corresponds with a breakout from such a consolidation with a definitive move above resistance, this is in line with Minervini’s strategy.

Volume: Volume is critical in confirming breakouts. For Minervini, an ideal entry is accompanied by a significant increase in volume, indicating strong institutional buying. If the entry day shows higher volume compared to previous days, particularly if it is 40-50% above the average, it validates the trade entry.

Relative Strength: Minervini often emphasizes the importance of relative strength, especially in a weak market. If RHM is outperforming the market and its peers, that would be a positive sign.

Entry Point: A proper entry is at the breakout from a sound base pattern. If RHM is breaking out from such a base, ideally after a period of price contraction, and doing so on higher volume, it would be considered a good entry point.

Risk Management: Setting a stop loss is crucial. Minervini typically sets stop losses just below the breakout point or a recent swing low to minimize potential losses.

Background Information on Rheinmetall AG

Rheinmetall AG is a significant player in the automotive and defense industries. They are known for:

Defense: Producing military vehicles, weapons, ammunition, and electronics. They are often involved in large contracts with governments around the world.

Automotive: Supplying engine systems, pumps, pistons, and other automotive parts to the commercial vehicle and passenger car markets.

Market Position: As a leading defense contractor and automotive supplier, Rheinmetall has a strong market position in Europe and significant international presence.

Combing the BEST of two WORLD's: Cathie Wood & Mark Minervini

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