Raytheon Technologies may be overbought at above $100. Look to buy on a retracement

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Raytheon Technologies Corporation (NYSE:RTX) topped $100 on the last days of February after a strong bullish push. The stock is trading slightly below the top of $104 at $101.50, with the level at $103-$104 developing into a resistance in the meantime. A range of policy shifts in military spending has been behind the recent surge.

We called Raytheon to cross the $100 mark following the Ukrainian crisis. Raytheon benefited from the war as it is a key military manufacturer. Countries such as Germany have called for more military spending, with the market digesting this as a call for others to boost the allocation.

As a result, Raytheon will continue to benefit from the Ukrainian crisis and the threat of the war. A price of above the previous top of $100 does not only look a possibility but also a milestone likely to be hit soon.

RTX is pushing to break past $104

Source – TradingView

Technically, RTX is on a clear bullish trend, with higher highs and higher lows. The stock retreated to the ascending trendline after touching a high of $104 in the last days of February.

The level of $104 coincided with overbought conditions, with the RSI at 76. With strong bullish momentum underway and the macroenvironment supporting RTX, the stock is a hold at the current level.

However, we believe that investors who are yet to jump in the trade should wait for a pullback before buying the stock. A stock retracement towards the ascending trendline should open a buy trade.

Summary

Raytheon continues to benefit from the ongoing Ukrainian war as countries ramp up military spending. The stock will rise further, and investors should continue holding. A pullback to the ascending trendline will open up more buy trades.

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