Conclusion, Investment Implications, Strategy

Recent successful tests of both the minor outright uptrend and the Strategic relative outperformance trend versus the benchmark S&P 500 suggest a potential low risk/high reward buying opportunity in Industrial Sector stock Raytheon Technologies Corporation (RTX).  A sustained rise above the $100.07 area would target a 9% rise to $112.00.  This is an Asbury Momentum idea.

Analysis and Rationale

Raytheon Technologies Corporation (RTX), an aerospace and defense company, provides systems and services for the commercial, military, and government customers worldwide. It operates through four segments: Collins Aerospace Systems, Pratt & Whitney, Raytheon Intelligence & Space, and Raytheon Missiles & Defense. The company is headquartered in Waltham, Massachusetts.

The upper panel of Chart 1 below plots RTX daily since December 2021 along with its 200- and 50-day moving averages, widely-watched major and minor trend proxies.  The lower panel plots the daily relative performance of RTX versus the SPDR S&P 500 ETF (SPY) along with its 63-day (quarterly) moving average, which we use to identify the Strategic (quarterly) trend of relative performance versus the US broad market.

Chart 1

The green highlights in the upper panel show that RTX has just tested and held its 50-day MA at $97.69 as of Apr 7th which indicates its current minor uptrend is still intact.  The green highlights in the lower panel show that RTX is also in the midst of a Jan 5th trend of Strategic relative outperformance versus the S&P 500 (SPY) and that this trend was tested and held on Apr 4th.  These factors suggest a potential low risk/potentially high reward opportunity to buy RTX.

Risk/Reward

Table 1 below shows that considering a $112.00 upside target with a protective stop placed below the $100.07 area, a long entry price of $103.00 would provide a 1:3.1 risk/reward ratio (risking $1.00 to make $3.10) with an initial risk of 2.8%.

Table 1

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