Technicals: Raytheon traded in a $7 channel (purple) between June 2012 and a breakout in late April this year. It never convincingly crossed the ML of the ensuing fork, and dropped out, gapping across the first warning line earlier this month. The collapse can be analysed as two ABCDs (green & grey ABCs visible on right), whose entry points (at 25% of the projected retracements) near-coincide with the third lower warning line around $75.
Aggressive trade: short $75.25 (entry point of smaller ABCD) stop: $76.26, targets: 1 $72.24 RRR 3.1 2 $70.33 RRR 5.1 3 $68.90 RRR 6.6 (based on the two ABCDs and the last obvious horizontal resistance, respectively.)
Less aggressive: wait until price clears the larger ABCD's 25% entry (74.78) or the smaller ABCD's CD midpoint (74.23).
DISCLOSURE: I'm just making all this stuff up. Feedback welcome. Good luck! :)
Comments
cryptoyoda
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Marked closed loss, but in fact low was 75.33, never triggering entry. Now a pretty attractive looking long, after resistance at lower WL, and signs of resistance on a sliding parallel ~$0.12 above it. :)
Target $78.65 based on ABCD, or 79ish based on WL above. Partial profits at the green arrows.
cryptoyoda
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RTN was recently implicated in study* linking many media advocates of intervention in Syria with major defence contractors. This is quite likely to surface in mainstream media**. It presents reputational risks to defence contractors and Raytheon in particular.
(Via its links with Stephen Hadley, "former national security adviser to George W. Bush, made a series of high-profile media appearances. Hadley argued strenuously for military intervention in appearances on CNN, MSNBC, Fox News, and Bloomberg TV, and authored a Washington Post op-ed headlined "To stop Iran, Obama must enforce red lines with Assad."")
Fundamental background: RTN manufactures Tomahawk missiles; it was the wardrums leading to Syria that led the stock out of its earlier trading range (specifically claims in April that the regime had used chemical weapons, crossing a clearly stated 'red line'). The first waterfall out of the fork dates to around the time the US started to back down (possibly to the UK vote against participating in a joint task force?).
Target $78.65 based on ABCD, or 79ish based on WL above. Partial profits at the green arrows.