Stocks were able to ignore the drama of the failed Wagner insurrection at the weekend, despite images being broadcast worldwide. According to a Wall Street Analyst, if Vladimir Putin's presidency fails, it will boost both energy and defense stocks.
The march to Moscow by Yevgeny Prgozhin, the Wagner chief, ended in farce after he announced that he would stop and have his men return back to their bases. The marchers stopped 125 miles from the Russian capital and turned around.
Prigozhin has denied that he tried to topple Putin, but he is still being investigated by Russian officials for the uprising.
Joe Biden, the US president, denied Western involvement on Monday. James Cleverly, the British foreign minister said that the mutiny exposed "clear flaws" in Russian backing for the Ukraine conflict. Analysts noted that there was a lack enthusiasm among analysts for any one side during the insurrection.
Crude oil, which initially spiked as the conflict unfolded and then fell back below $70 per barrel Monday, was trading at a price of less than $60. Gold was almost flat.
Defense stocks like Lockheed Martin (LMT), Raytheon Technologies(RTX)and General Dynamics(GD) are all in red. Boeing (BA), however, was up a little. The market was down.
In a client note, Swissquote Bank's senior analyst Ipek Ozkardeskaya stated that investors will ignore the Wagner incident unless new developments occur which could alter the course of war in Ukraine. "Until then, the markets will continue to operate as usual."
Sam Stovall, CFRA's chief investment strategist, told IBD that the market will be unaffected "unless Putin is overthrown". If this happens, "oil prices and defense stocks will likely rise."
Louis Navellier, founder of Navellier & Associates, said in a client note that the weekend events in Russia "had increased uncertainty in global crude oil supplies." He noted that crude oil transported by sea was declining, which "may be an indication that Russia's oil supplies to India and China are waning."
Defense Stocks To Watch
Boeing shares are now below the flat buy-in point of 221.33, after moving previously above it. The 50-day moving is currently being tested as a support.
The Dow Jones stock is currently earning low earnings, but there are expectations for a turnaround. It has ranked among the top 13 stocks in terms price performance during the last 12 months.
Lockheed Martin has formed a flat bottom and is close to consolidation lows. This is a pattern of the second stage. The target is to reach an ideal entry of 508.10.
Investors who are more aggressive could buy at an earlier stage if the moving average moves back above 50 days. The F-35 manufacturer has an EPS rating of 81, but its stock market performance is not impressive.
Raytheon Technologies created a base with a handle. The optimal buy point is 100.68. This is a pattern that is in its first stage, so it's more likely to yield big gains.
Investors want to see the performance of both the stock and its price improve in future. It has an IBD Composite rating of 73 out 99.
Transdigm is one of the top performers in the Aerospace/Defense sector. This is a stock to keep an eye on, as the price has been extended beyond a base buy point of $772.01.
Its overall strong performance has earned it a Composite rating of 93. The stock has performed in the top 7 percent of all issues over the last 12 months. The earnings are expected to increase by 44% in 2020, and then 28% in 2024.
The company's earnings are also notable. The company's EPS grew by an average of 46% over the last three quarters. This is excellent. Big Money has been a net buyer of late, with its Accumulation/Distribution Rating coming in at a solid B-.
Stock Market Energy Plays To Watch
Shell (SHEL), in the group of oil stocks consolidated, is near an entry of 62.75. This is the first stage base.
The overall performance here is strong, as its Composite Rating comes in at 85 points out of 99. The EPS rating is also strong at 89.
Weatherford (WFRD), a leader in the oil and gas industry, is approaching a first stage cup with handle buy point of 69.19. The handle may eventually become a flat bottom.
The performance is outstanding, as its IBD Composite rating comes in at an almost perfect 98. Its earnings and stock performance are both impressive.
Chart Industries (GTLS), is in a zone of buy above a consolidation level of 152.50. It has moved away from its major moving averages.
Funds hold 78% of the company's stock.
Chart's earnings will increase by 33% between 2023 and 2024.