The BAE Systems share price continues its march to the north, gaining 0.34% in Thursday’s trading session. This comes after the 3.51% gain on Tuesday, 28 June, that sent the stock to a new record high. Wednesday saw the price showing a pinbar, but the bulls maintain control in Thursday’s session as the stock aims for a 6th straight winning session.
The strong tailwinds powering the BAE Systems share price rise have arisen from the increase in military spending by the US, UK and European member countries of NATO in response to the Russia-Ukraine conflict. This has allowed the company to pull in contract after contract, almost non-stop in the last two months.
The US government has awarded the company a $12 billion contract for work on intercontinental ballistic missiles (ICBM). BAE was one of five companies to bid on the contract, which will be handled at an Air Force Base in Utah. Another contract was awarded by Slovakia for the company’s CV90MkIV infantry fighting vehicle, with the contract for production due for finalization in December.
In my last forecast, I indicated that the bull’s immediate northbound target, based on the double bottom pattern within the triangle, lay at 826.0. The 28 June candle met this target. A subsequent push to the north hit an all-time high of 840.6, but this met rejection and the price continues to trade around the resistance barrier at 826.0. So here is the BAE Systems share price forecast going forward.
The bears need to force a pullback from rejection at 826.0 to initiate a corrective decline toward the 800.4 psychological price mark, acting as the support formed by the high of 7 June and the low of 27 June. A further decline targets 776.8, the upper border of the completed ascending triangle. An additional support pivot below comes in at 743.0, the site of the 3 May high.
On the flip side, the measured move from the triangle’s breakout rests at 871.0. For this target to be achieved, the bulls must uncap the barrier at 826.0. This could come from a straight break of this level from the current price candle, which has violated this resistance intraday, or it could come from a bounce on the listed support targets. The 28 June high at the 840.6 price mark constitutes an intervening barrier that must give way for this move to come to fruition.
This post was last modified on Jun 30, 2022, 10:31 BST 10:31