TransDigm Group is a developer and manufacturer of military and commercial aerospace components. It is a Fortune 1000 company. The company faces a difficult time in the near-term as 70% of its business is from commercial customers. However, 30% comes from the defense segment which is recession-proof. Additionally, 55% of the company’s revenues are from aftermarket sales, a segment that is a stable income generator. So, when the economy returns to normality, TransDigm has a business model that is diversified and poised for long-term growth.
The long term monthly chart of TransDigm indicates that the company’s stock has been in a long uptrend which was recently reversed in February and March of 2020. The stock price fell by almost 70% during those two months. The price broke the bottom of the long-term trend but then took support at a crucial $316 level, which in the past has also acted as an important support. Since the fall, the price has now pulled back by 130% and there seems to be no resistance all the way to $640. Stop loss can be placed close to the bottom trend line below $400.
Positions taken today at $464 with a stop loss -28.5% below at $332. Short term profits could be taken at the top of the range at $600 giving a profit of 29%
On the video and images above you will see the reason this stock was selected.
You will see the image is of a monthly chart of the stock showing the long-term upwards trend formed over the years. You will also see the entry point and the where the stop loss is placed. For more information please watch the video given.
Once it is time to move the original stop loss up you will see an additional image.