Northrop Grumman is one of the largest weapons manufacturers and defence contractors in the world. It employs over 90,000 people and did revenues in excess of $36 billion in 2020. Its most iconic projects include the development of the B-21 Raider, the fuselage for the F-35 program, and multiple other aerospace technologies. Defence majors like Northrop benefit from wide moats arising out of government contacts, customer stickiness due to the mission-critical nature of defence systems, and technological prowess. The long term growth prospects of the company appear strong.

The 10-year monthly chart for Northrop shows a consistent uptrend with two major pullbacks, one in 2018 and another in 2020. The most recent pullback through 2020 saw the price drop about 20% over two months. Since April, the price has been range-bound between $300-$350, and the last few months had seen the price go below the bottom of the long-term trend. In March 2021, the price has bounced back up above the bottom trendline. It now looks likely to test the $350 levels again. The stop loss for this trade can be placed below the low of the March 2021 candle at around $290.

Position entered into our long-term tracking portfolio today. The entry point is at $323.76, and stop-loss placed at $259.03, which is 20% below the entry point. The short-term to medium take profit at the top of the trend is set at $389.98, giving a profit of 21%.