SIA Chartsā relative strength rankings help investors identify opportunities in stocks which are outperforming their peers or index benchmarks on a relative basis. Outperformance often reflects improving investor expectations for strong company growth or sector growth. The rankings not only help investors to identify which stocks in a universe are outperforming and underperforming against their peers, but also when relative performance trends are changing.
Increased Geopolitical tensions have buoyed the Aerospace and Defence (A&D) Sector of late with Defense stocks climbing Friday after Israel launched a series of airstrikes on Iran, raising tensions in the Middle East and heightening fears of a broader regional conflict. The SIA Algorithm picked up on increasing money flows in the space in recent weeks, and we have seen the Aerospace and Defence (A&D) Sector forming positive moves with the sector now ranked at the #1 spot in the Favored Zone of the SIA Stock Sectors report, up 3 spots in the last quarter. Against this sector backdrop, we look at an example in the A&D space.
RTX Corp. (RTX) recently entered the Favored Zone of the SIA S&P 500 Index report on February 21, 2025, at a price of $123.29, and is showing extremely strong relative strength moves up the S&P 500 report. RTX has gained 15 spots in the last day, 20 spots in the last week, and 63 spots in the last month exemplifying the consistent money flow increases the SIA Algorithm picked up over the past little while. Currently, the shares reside in the 53rd spot out of 505 positions in the report, with the closing price on Friday of $145.69 representing a 18% increase since its entry in the favored zone.
In looking at the attached candlestick chart of RTX, we see the shares trend upwards in a steady pattern of higher highs and higher lows from October of 2023 until April of this year, when the shares experienced a sharp but brief correction. However, the shares still held onto its favored status within the SIA S&P 500 report. Most importantly, when the shares dipped earlier this spring it held its prior support area of the $113-$115 area where the shares were back in January of this year. Then the shares regained traction and now has achieved a new high when it broke above prior resistance at its previous high of $135.00. The shares are in ānew discoveryā territory now at new all-time highs. Resistance could be forthcoming at the psychological and round number of $150.00 with support at its prior high of $135.00.
In looking at the most recent price action of the Point and Figure chart since the beginning of the year, we see the shares drift down to the $113.82 level in January, followed by a column of rising Xās stopping at the $133.00 area. A brief pause ensued where the shares trended sideways from April to May but held important support at the $113.82 level. Now in the last few months alone, the shares have been very strong with a rising column of Xās lasting 11 boxes without even a 3-box reversal and during this time has achieved new all-time highs.
With such a strong move of late we could see resistance forthcoming at $150.19 and, above that, $162.57 based on measured moves. On the downside, support is at its 3-box reversal of $133.36 which is also the previous high as prior resistance now acts as new support and, below that, $123.20. The shares currently exhibit a bullish Spread Double Top pattern and with an SMAX score of 9 out of 10, the shares are exhibiting strong near-term strength against the asset classes.
RTX is the world's largest aerospace and defense company.
RTX provides systems and services for the commercial, military, and government customers worldwide. It operates through four segments: Collins Aerospace, Pratt & Whitney, Raytheon Intelligence & Space, and Raytheon Missiles & Defense.
Disclaimer: SIACharts Inc. specifically represents that it does not give investment advice or advocate the purchase or sale of any security or investment whatsoever. This information has been prepared without regard to any particular investors investment objectives, financial situation, and needs. None of the information contained in this document constitutes an offer to sell or the solicitation of an offer to buy any security or other investment or an offer to provide investment services of any kind. As such, advisors and their clients should not act on any recommendation (express or implied) or information in this report without obtaining specific advice in relation to their accounts and should not rely on information herein as the primary basis for their investment decisions. Information contained herein is based on data obtained from recognized statistical services, issuer reports or communications, or other sources, believed to be reliable. SIACharts Inc. nor its third party content providers make any representations or warranties or take any responsibility as to the accuracy or completeness of any recommendation or information contained herein and shall not be liable for any errors, inaccuracies or delays in content, or for any actions taken in reliance thereon. Any statements nonfactual in nature constitute only current opinions, which are subject to change without notice.
