Since late February, shares of Raytheon  (RTN - Get Report) have been trading in a fairly narrow range just above major support. This sideways consolidation has given RTN the time to work off its overbought reading while building a solid base for a fresh rally leg. With earnings just around the corner, the stock began to perk up late last week. Monday RTN was moving well again, as an upside breakout is beginning to look more likely.

At the March and April lows, RTN held the lower band of a major support zone between $153.00 and $150.00. This key area, which marks a series of post-election highs, is now showing signs of strength. RTN has a very solid foundation in place to launch a fresh rally. A positive reaction from investors following Thursday's first-quarter report could provide the spark needed to complete a breakout. Once past the March high, RTN has room to run.

Bullish RTN investors should be very encouraged by the action of late. The stock should be considered a low-risk buy near current levels. On the downside, a clear break below $151.00 would take out last week's low, indicating more consolidation is ahead. On the upside, the stock will clear an important hurdle once the $158.00 area is taken out. RTN will have a long way to travel before it re-enters overbought territory. 

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Long RTN