Defense Contractors Scan
Defense Contractors Scan
Defense sector showing bifurcation: LMT and NOC rising on NATO/budget tailwinds (RSI 65, 56, both above SMA), GD flat and approaching neutral (RSI 49), Boeing (BA) still in turnaround pain (RSI 41, -7.9% 30D). LHX quietly strongest relative setup (RSI 59, above SMA). RTX softening slightly (RSI 54, -0.8% vs SMA).
Quick Snapshot
| Signal | Reading |
|---|---|
| Overall | 🟢 MILD BULLISH — Defense sector intact; geopolitical tailwinds driving LMT/NOC; no oversold names |
| Strongest | LMT (RSI 65, +10.7% 30D), LHX (RSI 59, +1.8% vs SMA), NOC (RSI 56, +8.1% 30D) |
| Weakest | BA (RSI 41, -7.9% 30D, -3.2% vs SMA), GD (RSI 49, -3.7% 30D) |
| Key theme | NATO/Europe rearming + US defense budget expansion driving sector; Boeing remains company-specific story |
Price Table (Data as of 2026-02-26)
| Stock | Company | Price | 7D Chg | 30D Chg | RSI | SMA20 | vs SMA | Status | Action |
|---|---|---|---|---|---|---|---|---|---|
| LMT | Lockheed Martin | $644.09 | -0.8% | +10.7% | 64.9 | $639.19 | +0.8% | 🟢 Above SMA | 🔒 Hold |
| NOC | Northrop Grumman | $712.53 | +2.0% | +8.1% | 55.8 | $702.62 | +1.4% | 🟢 Above SMA | 🔒 Hold |
| LHX | L3Harris | $354.17 | +2.2% | -0.0% | 58.7 | $348.06 | +1.8% | 🟢 Above SMA | 🔒 Hold |
| RTX | RTX Corp | $197.88 | -2.4% | +2.3% | 54.3 | $199.44 | -0.8% | 🟡 Below SMA | 🔍 Watch |
| GD | General Dynamics | $349.92 | +2.2% | -3.7% | 48.6 | $350.64 | -0.2% | 🟡 At SMA | 🔍 Watch |
| BA | Boeing | $228.72 | -6.3% | -7.9% | 40.9 | $236.37 | -3.2% | 🟡 Below SMA | 🔍 Watch |
Tier Analysis
Tier 1 — Working (Hold / Trim at RSI 75+)
LMT — Lockheed Martin at RSI 65, +10.7% 30D, above SMA. NATO/Europe defense rearming driving demand for F-35, HIMARS, missile defense. US defense budget expanding. Thesis intact. Hold; trim approach RSI 75.
NOC — Northrop Grumman RSI 56, +8.1% 30D, above SMA. B-21 Raider production, space systems, ICBM contracts all active. Less F-35 cyclicality than LMT. Steady accumulator.
LHX — L3Harris RSI 59, +1.8% above SMA. Quiet outperformer. Communications/ISR systems. Less headline-driven but consistent. +2.2% in 7 days.
Tier 2 — Neutral / Pullback (Watch for Direction)
RTX — RSI 54, -0.8% vs SMA, slight 7D pullback (-2.4%). Raytheon missiles at full production (Stinger, Patriot, AIM-120), Pratt & Whitney engine recovery ongoing. Fair entry zone under $195.
GD — General Dynamics RSI 49, -3.7% 30D, at SMA. Gulfstream business jets + combat vehicles + Munitions. Not getting the NATO premium LMT/NOC are. Watch for catalyst.
Tier 3 — Company-Specific Weakness (Not Sector Story)
BA — Boeing RSI 41, -7.9% 30D, -3.2% below SMA. Turnaround story: 737 MAX rate ramp, 777X delays, Starliner writeoffs, strike recovery. Not a defense-spending play — this is a manufacturing/execution story. RSI 41 is not compelling entry; needs RSI <30 to be interesting as a deep value speculative.
Entry Zones
| Stock | Entry Zone | RSI Trigger | Conviction | Notes |
|---|---|---|---|---|
| 🟡 LMT | $620-$640 | RSI 55-58 pullback | HIGH | Core defense holding; entry on any NATO-sentiment dip |
| 🟡 NOC | $690-$710 | RSI 48-52 pullback | HIGH | Steady grower; B-21 production ramp ongoing |
| 🟡 LHX | $340-$350 | RSI 50-54 pullback | MEDIUM | Quieter name; good risk/reward on dip |
| 🟡 RTX | $193-$200 | RSI <50 | MEDIUM | Missiles + engine recovery; wait for SMA reclaim |
| ⏳ GD | $340-$350 | RSI <45 | MEDIUM | No NATO premium yet; needs catalyst |
| ⏳ BA | $200-$215 | RSI <30 | SPECULATIVE | Deep value turnaround only; needs RSI capitulation |
Action Matrix
| Action | Stocks | Why |
|---|---|---|
| 🔒 HOLD | LMT, NOC, LHX | Above SMA, trend intact, NATO/defense tailwind |
| 🔍 WATCH | RTX, GD | Neutral zone; wait for RSI pullback to 45-50 for entry |
| ⏳ WAIT | BA | Turnaround not defense play; wait for RSI <30 capitulation |
Sector Context
Why defense now:
- NATO 2% GDP commitment now being enforced — European nations buying US systems (F-35, Patriot, HIMARS)
- Ukraine conflict ongoing — replenishment orders and live-fire validation of US weapons accelerating procurement
- US defense budget 2026 proposed increase — bipartisan support for procurement vs. 2025 sequestration fears
- Indo-Pacific buildup — AUKUS submarine, Pacific deterrence, Taiwan strait tensions driving long-cycle contracts
Boeing risk factors:
- 737 MAX production rate still recovering from strike-related disruption
- 777X certification delayed; freighter variant orders uncertain
- Defense segment (KC-46 tanker, T-7 trainer) absorbing cost overruns
- NOT a NATO tailwind story — execution risk dominates
The Gold
Key Discoveries
| Discovery | Implication |
|---|---|
| LMT +10.7% 30D while broader market -0.7% | Defense outperforming = sector rotation into geopolitical safety trade |
| LHX quietly +1.8% above SMA — underappreciated | May be better risk/reward than LMT at these levels; less crowded |
| BA -7.9% 30D while peers rise | Company-specific execution risk; Boeing is NOT a defense-cycle play right now |
| GD flat while LMT/NOC rip +8-11% | GD's Gulfstream/combat vehicle mix not getting the NATO premium — potential catch-up |
Open Questions
- Will European defense spending translate to incremental US OEM orders or favor Airbus/MBDA?
- Boeing: at what price does the turnaround become compelling? RSI 41 is not there yet.
- GD: will Abrams M1A2 replenishment orders (Ukraine) create a catalyst for catch-up?
- LMT near RSI 65 — when does it reach 75+ and become trim territory?
Related
10 eventsNo direct external sources are attached to this read.