Public trading strategy
Middle East conflict escalates — park your money in defense contractors for safe
Thesis
When geopolitical conflicts escalate suddenly, governments immediately reassess their defense budgets and military readiness. The U.S. airstrike on Iranian facilities signals a potentially prolonged engagement in the Gulf. As investors dump risky tech stocks, capital typically rotates into defense companies that provide drones, surveillance, and munitions. Companies like Lockheed Martin and RTX Corp offer a defensive hedge in a volatile, war-footing market.
Strategy approach
Build a defensive momentum strategy on LMT and RTX on the Daily timeframe. Go long when the stock price closes above its 20-day high while the S&P 500 (SPY) closes below its 20-day low. Use a 5% trailing stop loss to protect capital.