NEW YORK (TheStreet) -- Defense contractors General Dynamics (GD) , Lockheed Martin (LMT) and Northrop Grumman (NOC) set all-time intraday highs over the last two trading sessions, while Dow component Boeing (BA) has lagged. Each solidly beat their third-quarter earnings estimates two week's ago.
Even though all four companies should benefit from continued military spending in the battles to defeat ISIS, investors should consider booking profits on the three leaders, raise some cash and build a position in Boeing.
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President Obama began to form a coalition in preparing for a prolonged war against ISIS and air strikes in Syria began on Monday, Sept. 22. At this time shares of General Dynamics, Lockheed Martin and Northrop Grumman were trading off recent all-time highs in a market that appeared vulnerable.
In a momentum market such as the technical dynamics present today, investors should consider taking some money off the table and employ an investment strategy employing sell-stops at lower than market levels that will lock in gains or limit losses.
Let's take a look at the profiles for today's defense stocks.
General Dynamics ($140.79) is up 47% year to date and declined from $130.17 on Sept. 19 to $114.73 on Oct. 15 versus its 200-day simple moving average at $113.43. After this correction the stock rallied 23% to an all-time intraday high at $140.78 on Oct. 31, helped by a solid third quarter earnings beat reported on Oct. 22.
Investors long this stock should consider employing a sell-stop below a key technical level at $131.50 to lock-in longer-term gains.
Lockheed Martin ($190.75) is up 28% year to date and declined 9.7% from $184.09 on Sept. 30 to $166.28 on Oct. 21 versus its 200-day simple moving average at $164.54. After this selloff the stock rallied 15% to an all-time intraday high at $191.93 on Nov. 3, helped by a solid third quarter earnings beat reported on Oct. 22.