Good technical signals and a possible breakout for TEXTRON INC.

A possible breakout setup was detected on TEXTRON INC (NYSE:TXT) by our stockscreener. A breakout pattern is formed when a stock consolidates after a strong rise up. We note that this pattern is detected purely based on technical analysis and whether the breakout actually materializes remains to be seen. It could be interesting to keep an eye on NYSE:TXT.

Technical Analysis Observations

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 9 out of 10. This is due to a consistent performance in both the short and longer term time frames. Also compared to the overall market, TXT is showing a nice and steady performance.

• Both the short term and long term trends are positive. This is a very positive sign.
• Looking at the yearly performance, TXT did better than 91% of all other 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 69 other stocks in this industry. TXT outperforms 88% 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 70.94 - 79.45 range, which is quite wide. It is currently trading in the middle of this range, so some resistance may be found above.

How does the Setup look for NYSE:TXT

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. There is a support zone below the current price at 76.18, a Stop Loss order could be placed below this zone. Very recently a Pocket Pivot signal was observed. This is another positive sign.

How to trade NYSE:TXT?

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.

More breakout setups can be found in our Breakout analyzer.