AeroVironment, Inc. is an American defense contractor headquartered in Arlington, Virginia, that is primarily involved in unmanned aerial vehicles (UAVs) (Wikipedia)
I have been eyeing the military industry for some time, but the stocks have never reached the price I would take. Anyway, AeroVironment looks among the best in the sector from both technical and fundamental perspectives.
The technicals:
There is a double top pattern that developed itself into a triangle. The bottom is specified by two significant lows exceeding a round number 100.0 to the downside. The most significant gap is in the location too.
I expect a lot of liquidity below the yellow rectangle. If we ever reach there without an overall market crash, I'll create the entry there. It's probably the last line of DEFENSE against the bear market. Remember, that the big players need that extra liquidity to open a significant position.
The fundamentals:
The drones were used in recent conflicts against both a professional army and militia/guerrilla force with great success. Even though, the army makes it clear that UAVs are not a replacement for any part of the military, the spendings on both the research and the development increases over time (Statista).
However, the coronavirus might cause some material issues, and increases in spending might be halted (Ibisworld), it is a kind of technology the US will not want to fall behind in. Well, it has already started to fall behind as Turkey develops the first 'dronecraft carrier'. I think the cuts are rather to hit other parts of the defense sector.
I like AeroVironment specifically because, with its focus on UAVs, it is likely to fight for the contracts in this category most hard and the price is as a result derived mostly from this growing part of the sector.
The crash:
The question is if there is enough time for the buying opportunity to develop & profit from before the markets crash. I will be looking for an opportunity between 95-100$, but might not decide to invest at all in the end.
I have been eyeing the military industry for some time, but the stocks have never reached the price I would take. Anyway, AeroVironment looks among the best in the sector from both technical and fundamental perspectives.
The technicals:
There is a double top pattern that developed itself into a triangle. The bottom is specified by two significant lows exceeding a round number 100.0 to the downside. The most significant gap is in the location too.
I expect a lot of liquidity below the yellow rectangle. If we ever reach there without an overall market crash, I'll create the entry there. It's probably the last line of DEFENSE against the bear market. Remember, that the big players need that extra liquidity to open a significant position.
The fundamentals:
The drones were used in recent conflicts against both a professional army and militia/guerrilla force with great success. Even though, the army makes it clear that UAVs are not a replacement for any part of the military, the spendings on both the research and the development increases over time (Statista).
However, the coronavirus might cause some material issues, and increases in spending might be halted (Ibisworld), it is a kind of technology the US will not want to fall behind in. Well, it has already started to fall behind as Turkey develops the first 'dronecraft carrier'. I think the cuts are rather to hit other parts of the defense sector.
I like AeroVironment specifically because, with its focus on UAVs, it is likely to fight for the contracts in this category most hard and the price is as a result derived mostly from this growing part of the sector.
The crash:
The question is if there is enough time for the buying opportunity to develop & profit from before the markets crash. I will be looking for an opportunity between 95-100$, but might not decide to invest at all in the end.