Company Background

Raytheon Company (RTN), together with its subsidiaries, is a technology company that specializes in defense and other Government markets. The Company develops products, services, and solutions in markets: sensing; effects; command, control, communications and intelligence (C3I); and mission support, as well as cyber and information security.

12 month projected EPS Growth Chart

EPS chart provided courtesy of zacks.com 

In general, the best rule of thumb is to open positions when the price of the stock is trading above the EPS chart. RTN Has been trading comfortably above this line for some time, and it is projected to maintain this trajectory.The ideal entry point, though this does not often occur would be to open a position when the price of the stock comes close to testing the EPS line. In this case, it would roughly correlate to price in the $95.00-$100.00 ranges. However, we would not advocate holding out only until it trades down to this range,  as it might or might not come to pass. The best strategy is to spread your money over a range of entry points.

The Technical outlook

The trend score determines whether a stock is in a bullish or bearish trend. Any score above 50 illustrates that the stock is trending upwards and vice versa. RTN Has a score of 65, which means the trend is bullish. This is a positive development as the markets are currently pulling back, and the stock is holding up well compared to the rest of the market. You want to open positions in stocks that are the strongest in the sector. RTN is among the Top 3 stocks in the Aerospace Defense equipment sector.

The stock is consolidating though it has held up remarkably well during this tumultuous period and this suggests that when the markets put in a bottom, this stock will most likely outperform the market. RTN is likely to test the 110-113 ranges before trending higher. A weekly close below 110.00 should result in a quick test of the 105-108 ranges. Note that both the MACD’s and the RSI are already trading in the oversold ranges. This is quite bullish considering that the stock is only trading 8% below its current highs. The stock also pays out a  decent dividend of 2.6%.