Is It Too Late to Buy Defense Stocks?

North Korea just fired off another missile, raising the stakes in its nail-biting confrontation with the U.S. and Asian allies. Gold fluttered while the yen sunk, mimicking price action after past launches, but those knee-jerk reactions have so far failed to generate stronger trends. It is a different story with U.S. defense stocks, which have rocketed to new highs since the November election, anticipating these disturbing events as well as substantially higher domestic and allied spending that should grow profits well into the next decade.

Many top-tier defense names have hit technically overbought levels and are in need of multi-week pullbacks to lock in new support levels, but the sector continues to generate lower-risk plays in mid-tier contractors as well as former laggards getting a second look from value-oriented market players. Let’s examine three of these potential winners, identifying price levels that should offer low-risk trade and investment entries. (See also: An ETF for Defense Spending Trends.)

Mid-cap U.S. defense stocks now offer better value than blue chips, carving breakout patterns that could yield gains into 2018. …read more

Read more here: Is It Too Late to Buy Defense Stocks?

Category: HII, FLIR, HXL

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