Defense Contractors
Defense Contractors
Defense has rolled over hard from its Q1 peak. Every name except GD is weak-down or worse. BA is imploding (RSI 32.2, -11.2% below SMA200). The 3x leveraged DFEN collapsed -27.6% in 30 days. GD is the only name still holding its trend — strong-up, RSI 52.6, sitting right on its SMA50.
Price Table
| Symbol | Price | RSI | Trend | vsSma200 | 7D% | 30D% | 3M% | From High |
|---|---|---|---|---|---|---|---|---|
| GD | $355.39 | 52.6 | strong-up | +7.3% | +1.7% | -0.5% | +4.8% | -3.9% |
| LMT | $627.39 | 47.1 | weak-down | +24.4% | -0.6% | -4.2% | +29.0% | -9.3% |
| LHX | $349.40 | 45.9 | weak-down | +17.7% | -2.2% | -3.8% | +18.5% | -7.9% |
| NOC | $692.13 | 42.5 | weak-down | +15.6% | -3.2% | -4.5% | +20.2% | -10.6% |
| RTX | $192.81 | 38.5 | weak-down | +12.0% | -1.4% | -4.8% | +4.9% | -10.1% |
| PPA | $167.35 | 36.8 | weak-down | +6.8% | +0.7% | -7.2% | +5.3% | -10.2% |
| ITA | $219.69 | 34.0 | weak-down | +4.4% | +0.8% | -9.5% | +0.8% | -12.4% |
| DFEN | $64.33 | 33.1 | weak-down | +2.3% | +2.0% | -27.6% | -4.1% | -34.2% |
| BA | $194.40 | 32.2 | down | -11.2% | +0.8% | -14.6% | -10.5% | -23.6% |
Sector Assessment
The Defense Run is Over (For Now): Q1 saw defense stocks surge on geopolitical fear premiums — LMT +29% 3M, NOC +20% 3M, LHX +18.5% 3M. But the last 30 days have seen uniform selling across the board (-3.8% to -9.5% for individual names). The war premium is priced in; now it's about earnings and contracts.
GD is the Outlier: Only defense name with strong-up trend and RSI above 50. Sitting right at its SMA20/SMA50 confluence ($355-356). If it holds here, it's the quality name in the sector. +34.6% 1Y, golden cross intact.
BA is a Separate Story: RSI 32.2, -11.2% below SMA200, death cross territory. The only defense name below its SMA200. BA's problems are execution/safety-related, not sector-related. -20.6% over 5 years while peers are up 95-175%. Avoid.
DFEN (3x Leveraged) Collapse: -27.6% in 30 days illustrates the danger of leveraged sector ETFs during corrections. Despite being +2.3% above SMA200, the volatility drag has been brutal.
Entry Zones
| Symbol | Entry Zone | Stop | Rationale |
|---|---|---|---|
| GD | $345–$355 | $330 | Strong-up; at SMA20 support; best technical profile |
| LMT | $600–$620 | $575 | Golden cross; +24.4% vs SMA200; pullback entry |
| LHX | $340–$349 | $320 | Best 1Y alpha (+53.6% vs SPY); golden cross |
| RTX | $185–$193 | $170 | +12% vs SMA200; golden cross; oversold at RSI 38.5 |
Action Matrix
| Symbol | Action | Rationale |
|---|---|---|
| GD | Buy / add | Only strong-up name; golden cross; near SMA20 support |
| LMT | Hold | Still +24.4% vs SMA200; golden cross; wait for bounce |
| LHX | Hold | Best long-term alpha; golden cross; watching for stabilization |
| NOC | Hold | Golden cross intact but weakening |
| RTX | Watch | RSI 38.5 oversold; golden cross buffer |
| ITA/PPA | Monitor | ETFs weakening; wait for sector turn |
| BA | Avoid | -11.2% below SMA200; structural problems beyond sector |
| DFEN | Avoid | 3x leverage magnifying drawdown; -27.6% 30D |
What Changed
- Uniform sector pullback: Every name -0.5% to -14.6% 30D — Q1 premium unwinding
- GD emerging as leader: Only defense name with strong-up trend; rotating into quality
- DFEN destruction: -27.6% 30D shows leverage risk when trend reverses
- BA decoupled: Only defense name below SMA200; company-specific problems
- Golden crosses still intact for LMT, NOC, GD, LHX, RTX — long-term structure not broken
Data: 2026-03-26 pre-computed summaries.
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