Two Ways: Lockheed Locked Out By Senate
Strengthen your portfolio in good times and bad.
The 58-40 vote passed today now cuts $1.75 billion from the fiscal 2010 budget which was originally earmarked for 7 additional F-22 fighter jets.
President Obama had pressured Congress to make the move. According to the New York Times, he vowed to veto the entire defense budget if it had included any funding for the F-22 fighter jet program. In his daily press conference, President Obama said, "At a time when we're fighting two wars and facing a serious deficit, expanding the F-22 would have been an inexcusable waste of money."
Lockheed CFO Bruce Tanner told analysts that the company had received "a full hearing" from Defense Secretary Robert Gates and would accept the decision.
Shares tanked 8.5% to $75.13.
From the Bull Pen: If you think the fears in LMT are overdone, short term traders might want to consider a put selling strategy. But know thy risk. If assigned, you'll have to purchase the shares. As far as defense plays, General Dynamics (GD) could be another upside opportunity. See the daily chart below for a potential inverse head and shoulders pattern.
Click here to enlarge.
From the Bear Cave: On the other hand, Lockheed's chart is technically broken, and the stock could have room to the mid 60's should the other support lines not hold. Those playing this should set a 2% buy stop above entry.
Click here to enlarge.
See you on the hump! Good night!
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