Navy shoots down drones, tankers hit — load up on defense stocks
Thesis
A tanker carrying Qatari crude was struck during a flare-up between the U.S. and Iran, while Iran simultaneously targeted U.S. military facilities in Kuwait and Bahrain. This represents a major escalation from a cold standoff to active, hot conflict. Meanwhile, the crypto market is melting down with massive outflows, showing that investors are highly fearful and shedding risk. When geopolitical conflict directly targets military assets and fear is spiking, defense contractors historically win big as governments rush to restock and prepare for prolonged engagements.
Strategy approach
Build a rule-based strategy that enters long LMT, RTX, and NOC on the D1 timeframe when oil prices (CL=F) spike more than 2% in a single day and Bitcoin (BTCUSD) is down more than 3% on the same day, signaling a major geopolitical and risk-off event. Exit after 21 trading days or a 7% trailing stop.