Global tensions and a fat defense budget are boosting military stocks — get in o
Thesis
A fresh government defense budget proposal is directly injecting money into military contractors, causing an immediate surge in their stock prices. This is happening against the backdrop of actual geopolitical conflicts in the Middle East, making the need for defense spending very real and likely to continue. When rising political tension is met with actual government funding, it acts as a massive catalyst for these companies. Buying the companies that build drones and defense systems captures this momentum.
Strategy approach
Build a breakout momentum strategy for defense stocks (KTOS, NOC, LHX) on the 4-hour (H4) timeframe. Enter a long position when the price breaks above the highest high of the last 10 periods. Place a stop loss at 1.5x the 14-period Average True Range (ATR) below the entry price. Target a 1:2 risk-to-reward ratio.