LMT - the good times are now over. My big bearish play.
We entered this stock before the Ukraine war when it was not a cool stock. Suffice it to say the bullish formation paid dividends and it has returned to a cool $440, netting us many profits in this long term trade.
However, the time has come now to exit and reassess at more reasonable valuations around a $350 stock price.
Unfortunately for Lockheed, and other defence companies, the Ukrainian war is proving to be a more limited engagement and as such, expectations of a full blown war between NATO and Russia must be tempered.
The weekly volume has been steadily declining along with a clear top pattern on the weekly RSI - I expect this stock to be $350 by the end of the year and as such have done a 4 way trade:
Call credit: 460/480c 12/31
Put debit: 380/400p 12/31
As well as some more fun 350/360p 12/31 put debits for a larger win should the target be met.
I will reassess this trade later this year.
This stock is up because of 1) limited ukraine war 2) expectations of a chinese move on Taiwan - unlikely 3) significant increases in US defence spending - unlikely in peacetime due to deficit constraints and inflation.
However, the time has come now to exit and reassess at more reasonable valuations around a $350 stock price.
Unfortunately for Lockheed, and other defence companies, the Ukrainian war is proving to be a more limited engagement and as such, expectations of a full blown war between NATO and Russia must be tempered.
The weekly volume has been steadily declining along with a clear top pattern on the weekly RSI - I expect this stock to be $350 by the end of the year and as such have done a 4 way trade:
Call credit: 460/480c 12/31
Put debit: 380/400p 12/31
As well as some more fun 350/360p 12/31 put debits for a larger win should the target be met.
I will reassess this trade later this year.
This stock is up because of 1) limited ukraine war 2) expectations of a chinese move on Taiwan - unlikely 3) significant increases in US defence spending - unlikely in peacetime due to deficit constraints and inflation.
Comment:
The weekly MACD is on the verge of crossing over, LMT does not stay overbought on weekly for long.