Conclusion, Investment Implications, Strategy

Howmet Aerospace Inc. (HWM) appears to be resuming its November 2020 major uptrend amid coincident quarterly relative outperformance versus the benchmark S&P 500 (SPX).  A sustained rise above the $30.72 area would help confirm this and would target an additional 15% rise to $37.00 per share.  This is an Asbury Momentum trade idea.

Analysis and Rationale

Howmet Aerospace Inc. (HWM) provides advanced engineered solutions for the aerospace and transportation industries in the United States, Japan, France, Germany, the United Kingdom, Mexico, Italy, Canada, Poland, China, and internationally. It operates through four segments: Engine Products, Fastening Systems, Engineered Structures, and Forged Wheels. The company was formerly known as Arconic Inc. The company was founded in 1888 and is based in Pittsburgh, Pennsylvania.

The upper panel of Chart 1 below plots HWM daily since September 2020 along with its 200- and 50-day moving averages, widely-watched major and minor trend proxies.  The lower panel displays a corresponding daily relative performance chart of HWM versus the benchmark S&P 500 (SPX, blue) along with its 63-day moving average (green, quarterly, our Strategic time period).

Chart 1

The rightmost green highlights in the upper panel show that HWM appears to be resuming its November 2020 major uptrend, as defined by its 200-day MA, following this week’s test of the 50-day MA.  Meanwhile,HWM’s current trend of quarterly relative outperformance versus SPX as shown in the lower panel also appears to be resuming following a test of it at that same time.  The leftmost green highlights show that similar tests of the Strategic relative outperformance trend on Jan 27th and Oct 29th resulted in the resumption of the trends in both panels.  A sustained rise above the 50-day MA, currently situated at $30.72, would help to confirm the outright uptrend has resumed and would target an additional 15% rise to $37.00 per share. 

Table 1 below shows that considering the aforementioned upside target and a protective stop placed below the $30.55 area, a long entry price of $32.15 would provide a 1:3.0 risk/reward ratio (risking $1.00 to make $3.00) with an initial risk of 5.0%.

Table 1


Click Here for a table containing all of our current stock, ETF and index ideas.

Please consult the table showing our Asbury 6 key market metrics to help determine if this investment is suitable for you.