Lockheed Martin (LMT)

I really like Lockheed Martin as a company and have enjoyed trading it over the last two years. Yesterday, February 25, 2009, it gave an opportunity for a trade based on long-term support in the 70 area.


Because of this support, it was too easy to anticipate and buy prematurely, as seen on the 5-minute chart. (A 70.73 entry at 10:40, when a better entry would have been when the 5 moving average crossed above the 30.)



Fortunately, LMT gave three opportunities for a profitable exit. The best strategy would have been to set a tight stop at or above 70, and get a better entry later if stopped out. Even better would have been to move the stops up as my initial entry turned profitable.

As LMT rallied late in the day, the 30-minute chart showed potential resistance at 71.80. Once the macd turned white on the 30-minute chart, it seemed it would reach this area, so I began moving up the stops. It is fortunate, as the market sold off sharply in the last 10 minutes. Moving up the stops is a necessary strategy in this news-driven market, and it helps insure profits. Trading with tight stops is liberating and adds to the satisfaction of a job well done at the end of the day.

LMT hit resistance at 72 and promptly fell back. Exit at 71.83 was close to the highs of the day.

The 10-minute chart shows there was more momentum to the last push upward, as the white macd line crossed above the 0 line. The macd indicator is brilliant, and we consider it to be imperative to making good trading decisions.