HEICO Corporation (HEI) is an American aerospace and electronics company that manufactures products for aircraft, spacecraft, defense equipment, medical devices, and telecommunications systems. Recently, HEICO gained significant attention following Berkshire Hathaway's announcement that it purchased 1.04 million shares of HEICO, valued at $185.4 million as of June 30, according to a regulatory filing. Instead of focusing solely on the impressive fundamental data, let’s rely on market efficiency and insights from millions of market participants who have cast their votes. Thankfully, the SIA AI extrapolates this information through its tireless relative strength calculations. SIA agrees that Mr. Buffett’s investment in HEICO is well-founded. Shares of HEICO, positioned within the Favored Aerospace and Defense sector, have emerged as a technical market leader in this top-ranked field. The SMAX score, although a more short-term indicator, confirms that HEICO is not only outperforming its peer group but also excelling relative to other asset classes. We encourage you to review the other names in the SIA Aerospace and Defense Report, as they are also strong performers. For instance, Rocket Lab, a mid-cap company with a market capitalization of $4.69 billion, has returned 110% in the past quarter, 54% in the past month, and is up nearly 13% in the past week. This list of equities represents a prime opportunity in the current market, where gains can be swift but are often accompanied by volatility. Therefore, caveat emptor applies, especially in light of the ongoing situation in the Middle East and current market conditions. It’s important to note that in any market correction, top-performing sectors often act as bellwethers, while the bottom relative performers in the weakest sectors tend to take the biggest hits.
Examining the point and figure chart, HEI is showing a positive trend with solid long-term performance. The significant growth spurt from 2016 to 2020 is noteworthy, followed by a more conservative consolidation period, excluding the brief COVID-19 crash. It appears that HEI shares have once again resumed their rapid growth trajectory, likely bolstered by Warren Buffett's endorsement. Currently, resistance is just above at $274.09, with additional resistance levels at $308.67 and $354.56, based on prior price movements and the breakout from the last consolidation range, highlighted in green. Support is established at the 3-box reversal level of $243.38, with further support from the consolidation base, which has a top level around $200.
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