Raytheon(RTN) - Get Report is a taking a major hit today. After an ugly earnings-inspired downside gap, the stock quickly recovered, but by midday the bounce was wiped out. Raytheon is now trading below its opening print and is one on the S&P 500's top 10-weakest members. The volatile movement that has dominated action since the election appears to be continuing and with it, lower prices are likely ahead.
Since it's powerful Nov. 10 'Election' breakout, Raytheon has been unable to maintain any upside momentum. The stock has been drifting lower since in a very wide and volatile range. This process now includes a second straight lower monthly high, quite a divergence from the consistent rally in the S&P 500. Following Thursday's news-inspired breakdown, further loses are on the way. For patient investors, a low-risk entry opportunity for this A-rated stock will present itself.
In the near term, Raytheon bulls should keep a close eye on the $138.50 to $137.00 area. This key support zone includes the stock's December spike low as well as the huge upside gap left behind on Nov. 9. Also in this area is an upward sloping 200-day moving average, which hasn't been tested since September 2015. If Raytheon can stabilize here, the wild volatility phase that has plagued the stock for 10 weeks may finally come to an end. Until then, RTN may prove to be a very frustrating long.