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Raytheon Technologies Corp. Growth of Quotations may Resume

2/8/2023 2:49 PM

The shares of Raytheon Technologies Corp., an American aerospace and defense conglomerate, have been growing strongly since October last year: in January, the price reached ten-month highs around 103.74 but then lost some of the gains.

Currently, quotes are influenced by opposite factors: on the one hand, the recent comments of US Federal Reserve officials contribute to the weakening of the stock market, and on the other hand, the company's medium-term and long-term prospects remain positive, which does not allow a serious correction to develop. Yesterday, the head of the regulator, Jerome Powell, once again confirmed that the process of slowing inflation in the American economy has begun, but the fight against it is far from over and noted that in the event of new strong statistics on the labor market or data on the resumption of price growth, the regulator might raise rates higher than currently assumed. These words disappointed investors, and now they expect a prolonged period of "hawkish" rhetoric, which could threaten a recession in the national economy. However, the overall fundamental picture favors stocks: the gradual recovery of countries from the pandemic is accompanied by an increase in the number of air transportation and increased demand for the corporation's aerospace sector, which currently generates about 55.0% of all profits. This year, it is planned to seriously increase the sale of Pratt engines, the supply of which, together with subsequent long-term maintenance, can seriously increase the company's income. In the defense sector, further growth in orders is also expected due to the prolongation of the Ukrainian military conflict and the overall increase in military spending worldwide. According to average estimates of experts, this year, the income of Raytheon Technologies Corp. could rise to 73.2M dollars, up 9.21% YoY, and earnings per share could be 5.16 dollars.

The trading instrument is close to the middle line of Bollinger bands, the breakout of which 98.44 (Murrey level [7/8]) will give the prospect of quotes returning to 101.56 (Murrey level [5/8]) and 103.12 (Murrey level [6/8]). The key "bearish" level is 93.75 (Murrey's level [0/8]). If it consolidates below it, the decline may continue to 90.62 (Murrey's level [–2/8]).

The indicators do not give a single signal: Bollinger bands are directed downwards, Stochastic reverses upwards from the oversold zone, the MACD histogram is near the zero zone, and its volumes are insignificant.

Resistance levels: 98.44, 101.56, 103.12. | Support levels: 93.75, 90.62.

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