With Tuesday's 1.2% gain, shares of Raytheon (RTN - Get Report) have strung together a nine-day winning streak. This impressive run has included nine straight higher lows, a very bullish run to begin the month. Raytheon is still below the 2016 peak, but a powerful breakout move for this A-rated stock could be brewing.
Immediately after the presidential election, Raytheon shot straight up like a rocket. The stock gained over 7% on Nov. 9 with the help of its heaviest upside trade since mid-2011. As impressive as this breakout was, the momentum quickly dried up and over the next 10 weeks Raytheon drifted sideways to lower while working its extremely high overbought reading. During this consolidation phase, the stock withstood a couple of damaging hits but never filled the huge election-inspired breakout gap. As the pattern wore on into late January, the stock appeared to be headed for a retest of major support. Once again, the stock held up well by putting in a second straight higher monthly low. Since then, Raytheon has regained its footing, and is set up well for a continued bull run.
In the near term, Raytheon investors should consider the stock a low-risk buy near current levels. A very solid support zone is now in place between $150 and $148. On the upside, a key hurdle as the rally continues will be the $152.60 area. This level marks the November 2016 spike high. On the downside, a close back below last week's low of $146.80 would indicate more sideways action is ahead before the February rally gets back on track.
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