Lockheed Martin Analysis: Is This Level A Logical Place To Buy? - Lockheed Martin (NYSE:LMT)

Shares of Lockheed Martin Corporation LMT are rebounding slightly after yesterday's selloff of more than 9%. A disappointing earnings release drove the move.

If the stock keeps falling, there is a level that many traders would consider a logical place to put a buy order. This is why our team of technical analysts has made it our Stock of the Day.

Sometimes when a stock drops to a support level, a reversal and move higher follow.

Support is a large group of traders and investors who are looking to buy shares around the same price. If some of the potential buyers think someone else will outbid them, they will increase the prices they are willing to pay.

Other buyers could see this and do the same thing. It results in a snowball effect that can push the price higher.

Good traders know that in the markets certain price levels have more importance than others. As you can see on the chart below, $443 has been important for Lockheed Martin for more than two years. It has provided support numerous times and each time a move higher followed.

$443 first became important as resistance in August 2022. This resistance broke in October 2022 and then the level turned into support in January 2023.

This happened because many of those who sold in August 2022 regretted their decision to do so. Many traders decide that if they can, they will repurchase their shares at the same price they were sold for. So, when the stock fell back to their sell price, they entered buy orders.

If there are enough of these orders, it will form support at the same price that had previously been resistance.

Lockheed rallied off of this support in January 2023. It also rallied off of it each time it reached it from May through September 2023. The same thing happened between October and December 2023.

Traders are watching this closely. If Lockheed reaches levels around $443 again, the stage may be set for a reversal and move higher.

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