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The stock is close to breaking out from a flat base with a 104.44 buy point. The stock is also arguably actionable from a rebound off its 10-week line.
Given current market conditions, investors looking for an early entry might be better off waiting for RTX stock to clear its March 25 high of 125.97. It hit resistance just shy of that key level at the end of last week.
Some investors might be tempted to buy RTX stock ahead of its expected breakout above $125.9, but market conditions could make it prudent to wait for a move higher before entering positions.
The stock has been in a strong uptrend since late 2020, but the recent market sell-off has taken a toll on many stocks, including RTX. The stock is now testing key support levels and looks poised for a bounce higher in the coming days or weeks.
However, given the current market environment, it might be wise to wait for RTX to clear its March 25 high before buying shares. A move above that level would confirm theuptrend is intact and provide a more favorable risk/reward setup for new entrants.
The relative strength line has been taking a breather following a recent spike. The current global security situation means another spike would be no great surprise.
In order to justify the effort of selecting individual stocks, it’s worth striving to beat the returns from a market index fund. But the risk of stock picking is that you will likely buy under-performing companies. We regret to report that long term Raytheon Technologies Corporation (NYSE:RTX) shareholders have had that experience, with the share price dropping 32% in three years, versus a market return of about 26%. Shareholders have had an even rougher run lately, with the share price down 12% in the last 90 days. However, one could argue that the price has been influenced by the general market, which is down 19% in the same timeframe.
Given the past week has been tough on shareholders, let’s investigate the fundamentals and see what we can learn.
To quote Buffett, ‘Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace…’ One way to examine how market sentiment has changed over time is to look at the interaction between a company’s share price and its earnings per share (EPS).
Raytheon Technologies became profitable within the last five years. We would usually expect to see the share price rise as a result. So given the share price is down it’s worth checking some other metrics too.
Revenue is actually up 7.4% over the three years, so the share price drop doesn’t seem to hinge on revenue, either. It’s probably worth investigating Raytheon Technologies further; while we may be missing something on this analysis, there might also be an opportunity.
Shares More Than Doubled In 2 Years
Raytheon stock dropped to an intraday low 40.93 in late March 2020 amid the Covid crash. From there it more than doubled to an all-time high 106.02 in late April this year before consolidating.
Raytheon stock holds the No. 15 rank among its peers in the Aerospace/Defense industry group. Espey Manufacturing & Electronics (ESP), Heico (HEI) and Hexcel (HXL) are among the top 5 highly rated stocks within the group.
When looking for the best stocks to buy and watch, one factor to watch closely is relative price strength. This proprietary rating identifies market leadership by showing how a stock’s price movement over the last 52 weeks measures up against that of the other stocks in our database.
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