Will Textron Inc breakout?

Our stock screener has spotted Textron Inc (NYSE:TXT) as a possible breakout candidate. A technical breakout setup pattern occurs when the stock is consolidating after a nice uptrend. Whether the actual breakout occurs remains to be seen of course, but it may be interesting to keep an eye on NYSE:TXT.

Technical analysis of NYSE:TXT

ChartMill assigns a Technical Rating to every stock. This score ranges from 0 to 10 and is updated daily. The score is determined by evaluating multiple technical indicators and properties.

Overall TXT gets a technical rating of 8 out of 10. In the last year, TXT was one of the better performers, but we do observe some doubts in the very recent evolution.

• The long term trend is positive and the short term trend is neutral. The long term trend gets the benefit of the doubt for now.
• When comparing the yearly performance of all stocks, we notice that TXT is one of the better performing stocks in the market, outperforming 84% of all stocks. We also observe that the gains produced by TXT over the past year are nicely spread over this period.
• TXT is part of the Aerospace & Defense industry. There are 64 other stocks in this industry. TXT outperforms 75% of them.
• TXT is currently trading near its 52 week high, which is a good sign. The S&P500 Index however is also trading near new highs, which makes the performance in line with the market.
• In the last month TXT has a been trading in the 69.50 - 74.80 range, which is quite wide. It is currently trading in the middle of this range, so some resistance may be found above.

Looking at the Setup

Besides the Technical Rating, ChartMill also assign a Setup Rating to every stock. This setup score also ranges from 0 to 10 and determines to which extend the stock is consolidating. This is achieved by evaluating multiple short term technical indicators. NYSE:TXT currently has a 8 as setup rating:

TXT has an excellent technical rating and also presents a decent setup pattern. Prices have been consolidating lately and the volatility has been reduced. A pullback is taking place, which may present a nice opportunity for an entry. There is a support zone below the current price at 70.24, a stop order could be placed below this zone. Another positive sign is the recent Pocket Pivot signal.

How can NYSE:TXT be traded?

A breakout could materialize when the stock breaks out to new highs above the current consolidation zone. One could wait for this to happen and buy when this happens. A stop loss could be placed below the consolidation zone.

This article should in no way be interpreted as trading advice. You should always make your own analysis and trade or not trade based on your own observations and style. The article is based purely on some technical observations.

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