Dow component United Technologies Corporation (UTX) spent the first three quarters of 2017 underperforming its defense contracting peers, but the stock has surged higher since September and has now reached major resistance at the 2015 bull market high. In turn, this price action has completed a multi-year inverse head and shoulders pattern, with a breakout having the potential to reach the $160s.
United Technologies shares bottomed out on Sept. 6, just one day after the company announced the acquisition of Rockwell-Collins, Inc. (COL) in a mega-deal expected to close by the third quarter of 2018. Concerns about high debt levels and government approval generated headwinds during the subsequent uptick, which has now reached the mid-$120s, marking the level at which 2014, 2015 and July 2017 rallies ended in major reversals. (See also: Rockwell Collins Clinches $30B Deal With United Technologies.)
The stock could have better luck this time around because the long-term price structure finally looks complete, with declines into October 2014 and September 2017 carving an inverse head and shoulder neckline that should generate strong buying signals when the price lifts above $125. And the timing couldn’t be better, with the start of 2018 likely to free up large tranches of institutional capital looking for fresh exposure.
Dow component United Technologies could break 2015 resistance in coming weeks and head toward $160. …read more
Read more here: United Technologies Stock Nears Major Breakout
Category: UTX, COL