Amidst the turbulence of global economic shifts, geopolitical crises and industry challenges, RTX Corporation (NYSE: RTX) emerges as a beacon of resilience and growth in last few quarters. The company, formerly known as Raytheon Technologies, recently released its Q1 2024 earnings report, unveiling a robust performance that surpassed market expectations.
Despite grappling with the repercussions of the GTF engine crisis, RTX managed to deliver impressive results, with sales soaring by 12% and adjusted earnings climbing by 10%. Collins Aerospace, a key segment of RTX, witnessed a 9% revenue surge, propelled by commercial aftermarket and OEM sales, while Pratt & Whitney exhibited a remarkable 23% growth in sales, albeit facing challenges with higher expenses.
Additionally, Raytheon, the defense arm of RTX, experienced a 6% increase in sales, reflecting the company’s diversified portfolio and adaptability in navigating complex market dynamics. With an upward trajectory in sales and earnings, RTX affirms its position as a stalwart in the aerospace and defense sector.
Now, let’s delve into the intricate tapestry of charts and indicators to discern the trajectory of RTX’s stock amidst these compelling developments.
The $105.2 resistanceOn RTX’s long-term weekly chart, we can see that after collapsing to $40 during the coronavirus crisis, the stock saw a rapid rise that took it beyond $100 by April 2022.
However, the stock seems to be stuck in a range since then. After the company announced issues with the GTF engine last year, the stock collapsed to below $70. It has managed to make a recovery since then but is still finding it tough to trade above $100.
For investors and long-term shareholders, as long as the stock doesn’t break above $105.2 and closes above it, it can remain range-bound in the medium term. Hence, buying is advisable only above that level.
Short-term: Narrow trading rangeIn the short-term hourly chart, RTX’s stock is stuck in a very narrow trading range between $99.5 and $102.5, since the start of April. A narrow trading range like this suggests a period of accumulation.
The accumulation pattern often leads to a breakout on the upside. So, short-term traders should be looking at buying the stock at current levels with a strict stop loss at $99.46.
For traders, who are bearish on the stock, it is advisable to go short only after the stock breaks below $99.5 while keeping a stop loss at $105.25. If the stock breaks below it, the next support (profit target) can be found at $94.2 and $86.5.
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