After reporting better-than-expected earnings, Northrop Grumman (NOC) took a nasty spill. After falling toward support around 440 the stock started a bit of a bounce Thursday morning. This move could be a relief bounce or it could be a reversal higher as buyers set in.
Seeing as how we are at a support level, we remember that we would look to take calls. However, a retest of this support level could be in the cards, getting too bullish too quickly could hurt you in the long run, but that does not mean this stock shouldn’t be on watch.
If we continue to ride higher, look for the stock to surpass 450 and hold above this level for longs. On the other side of that, watch a breakdown of 440 to take a short position. Remember, if we are in between levels and zones, we are not trading. To give ourselves the highest probability of a winning trade we should wait for the price to reach either or top or bottom level, not before. Check out the video breakdown below for more!