Will Friday's Reversal Light A Fire Under This Defense Company?

Throughout much of the last 6 months, Lockheed Martin (LMT) has been trending higher and, despite its recent absolute price weakness, remains very close to its 1-year relative high vs. its defense peers ($DJUSDN).

According to zacks.com, LMT is expected to earn $7.41 per share, but I think we're going to see a much better number than that and I wouldn't at all be surprised to see another uptrend emerge. Check out the current chart:

Enter Lockheed Martin Corp. (LMT):

On Friday, LMT printed a nice reversing hammer candlestick off of price support. I see a quick rally to 450 to test a bit of overhead gap resistance. But if LMT can negotiate that level, then I expect much further gains ahead and it may begin with earnings that are due out on Tuesday morning. Defense stocks have weakened considerably on a relative basis, but they were strong well into the fourth quarter. LMT's leadership position in the space suggests we are "more likely than not" going to see a strong report. If the report is weak, then I'd be careful with most companies in this industry. For now, however, I'm leaning bullishly on the group.

Happy Trading! Tom Bowley Chief Market Strategist EarningsBeats.com Better Timing. Better Trades.