TEXTRON INC is setting up nicely for a breakout.

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.

Zooming in on the technicals.

Every day ChartMill assigns a Technical Rating to every stock. The score ranges from 0 to 10 and 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.

• The long and short term trends are both positive. This is looking good!
• Looking at the yearly performance, TXT did better than 92% 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 one of the better performing stocks in the Aerospace & Defense industry, it outperforms 88% of 69 stocks in the same industry.
• TXT is currently trading near its 52 week high, which is a good sign. The S&P500 Index is trading in the upper part of its 52 week range, but not near new highs, so TXT is leading the market.
• TXT is currently showing a bull flag pattern! A bull flag pattern occurs when prices pull back slightly after a strong rise up. This may be a nice opportunity for an entry.

How do we evaluate the setup 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:

Besides having an excellent technical rating, TXT 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 76.98, a Stop Loss order could be placed below this zone. Another positive sign is the recent Pocket Pivot signal.

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.

Of course, there are many ways to trade or not trade NYSE:TXT and this article should in no way be interpreted as trading advice. The article is purely based on an automated technical analysis and just points out the technical observations. Always make your own analysis and trade at your own responsibility.

Our Breakout analyzer lists more breakout setups and is updated daily.