LMT, Lockheed Martin Corp.

f 35lmt dec 17 2012

They are planning to make at least 2400 of these “hybrid” fighter jets that now are budgeted to cost close to $200 mln. a piece. So far about $65 bln. has been spent on the development of this plane (2x ’s capitalization) and things are not going smoothly for this most costliest defense programme ever. Given this fundamental backdrop and prospects of the negative-feedback loop continuing for some time yet, it is amazing that the stock is still trading at such lofty levels.

The count is not entirely clear but plain enough to assume that the drop in 2008 was wave A, the rebound of about 62% thereafter wave B, so now we should expect wave C down to start any time now. In detail;

lmt dec 17 2012 s

A nice wedge for the C part of the A-B-C rebound. The count could be wrong in so far that we may only be completing wave 3 of C rather than the whole thing. Unlikely considering the RSI and MACD. A sell or use a stop at about $86.