General Dynamics Corp.  (GD - Get Report) , Lockheed Martin Corp.  (LMT - Get Report) and Northrop Grumman (NOC report quarterly results this week. These stocks have strong gains since their Dec. 26 lows, but remain in bear market territory since setting all-time highs between February and April 2018.

General Dynamics closed Friday at $171.22 up 8.9% so far in 2019 but still in bear market territory 25.6% below its March 9, 2018 all-time high of $230.00. The stock is up 19% from its Dec. 26 low of $143.87. The defense company has a P/E ratio of 15.77 and offers a dividend yield of 2.17% according to Macrotrends. Analysts expect the company to earn $2.97 a share when they report earnings before the open Wednesday, Jan. 30. The consensus call is that earnings-per-share and revenue will show solid year-over-year gains.

Lockheed Martin closed Friday at $287.04, up 9.6% so far in 2019, but still in bear market territory 20.9% below its Feb. 16, 2018 all-time high of $363.00. The stock is up 19% from its Dec. 26 low of $241.18. The defense contractor has a P/E ratio of 16.15 and offers a dividend yield of 3.07%. Analysts expect the company to earn $4.36 a share when they report earnings before the open Tuesday, Jan. 29. The F-35 Lightning II 5th Generation fighter with advanced stealth capabilities should be the driver in earnings guidance.

Northrop Grumman closed Friday at $272.84 up 11.4% so far in 2019 but still in bear market territory 24.4% below its April 5, 2018 all-time high of $360.88. The stock is up 22% from its Dec. 26 low of $223.61. The defense contractor has a P/E ratio of 15.59 and offers a dividend yield of 1.76%. Analysts expect the company to earn $4.40 a share when they report earnings before the open on Thursday, Jan. 31. The consensus is that the aerospace-defense company will extend its string of earnings beats to 15 consecutive quarters.

The Daily Chart for General Dynamics

 

Courtesy of MetaStock Xenith

Shares of General Dynamics has been below a "death cross" since June 8, 2018 when the 50-day simple moving average fell below the 200-day simple moving average to indicate that lower prices would follow. Under this bearish formation, investors should reduce holdings on strength to the 200-day SMA, which was last doable on Oct. 9 when the average was $205.77. When the stock traded as low as $143.87 on Dec. 26, that day became a "key reversal" with the close of $152.17 above the Dec. 24 high of $149.68. The Dec. 31 close of $157.21 was the input to my proprietary analytics which resulted in the three horizontals lines on the chart. My monthly pivot is $167.11 with my semiannual and annual risky levels converged as the second line at $194.23 and $194.98 and my quarterly risky level at $209.74.

The Weekly Chart for General Dynamics

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The weekly chart for General Dynamics is positive with the stock above its five-week modified moving average of $168.41 and just below its 200-week simple moving average or "reversion to the mean" at $172.89. The 12x3x3 weekly slow stochastic reading ended last week at 36.42 up from 27.80 on Jan. 18.

Trading Strategy: Buy weakness to my monthly value level at $167.11 and reduce holdings on strength to my semiannual and annual risky levels at $194.23 and $194.98, respectively.

The Daily Chart for Lockheed Martin

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Shares of Lockheed Martin have been below a "death cross" since Nov. 8 when the 50-day simple moving average fell below the 200-day simple moving average to indicate that lower prices would follow. The Dec. 31 close of $261.84 was the input to my proprietary analytics, which resulted in the four horizontal lines on the chart. My monthly pivot at $283.69 held at Monday's open. My semiannual, annual and quarterly risky levels are $322.75, $336.92 and $345.52, respectively.

The Weekly Chart for Lockheed Martin

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The weekly chart for Lockheed Martin is positive, with the stock above its five-week modified moving average of $283.32 and above its 200-week SMA or "reversion to the mean" at $267.29, which held as 2019 began. The 12x3x3 weekly slow stochastic reading ended last week at 35.32, up from 26.49 on Jan. 18.

Trading Strategy: Buy this stock on weakness to my monthly value level of $283.69 and add to this position on weakness to the 200-week simple moving average or "reversion to the mean" at $267.29. Reduce holdings on strength to my semiannual, annual and quarterly risky levels at $322.75, $336.92 and $345.52, respectively.

The Daily Chart for Northrop Grumman

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Shares of Northrop Grumman have been below a "death cross" since July 24, when the 50-day simple moving average fell below the 200-day simple moving average to indicate that lower prices would follow. The high this day was an opportunity to reduce holdings at its 200-day SMA at $322.07. The Dec. 31 close of $244.90 was the input to my proprietary analytics, which resulted in the four horizontal lines on the chart. My monthly pivot at $247.50 became a value level, which held as a buying opportunity on Jan. 7. My annual, semiannual and quarterly risky levels are $298.16, $333.37 and $334.79, respectively.

The Weekly Chart for Northrop Grumman

Courtesy of MetaStock Xenith

The weekly chart for Northrop Grumman is positive, with the stock above its five-week modified moving average of $264.31 and above its 200-week SMA or "reversion to the mean" at $244.91, which was crossed as a buying opportunity as 2019 began. The 12x3x3 weekly slow stochastic reading ended last week at 39.18 up from 28.63 on Jan. 18.

Trading Strategy: Buy weakness to my monthly value level of $247.50 and to the 200-week SMA at $244.91. Reduce holdings on strength to my annual, semiannual and quarterly risky levels at $298.16, $333.37 and $334.79, respectively.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.