Fairlead Strategies Idea Generator

BWX Technologies (BWXT) & Updates (CACI, FXI, ITUB, OGS, STLD, VPU)

We are removing the iShares China Large-Cap ETF (FXI) from our list of recommendations because it gapped below our stop-loss level. We also recommend taking profits in ONE Gas (OGS), because it is approaching our targeted level ahead of earnings.

To preserve gains in some of our existing ideas, we are tightening stop-loss levels as indicated below:

• CACI International (CACI) $277 to $290

• Itau Unibanco (ITUB) $4.13 to $4.34

• Steel Dynamics (STLD) from $69 to $70

• Vanguard Utilities ETF (VPU) $148 to $156

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The aerospace and defense industry remains a strong performer in relative terms and looks poised for near-term upside follow-through in absolute terms. An intriguing setup is BWX Technologies (BWXT):

• BWXT appears to be undergoing a long-term turnaround, noting the stock has made higher lows since bottoming in February. Having gained short-term momentum, BWXT is poised to break out above resistance defined by the weekly cloud model (shaded area on the chart), which would complete the turnaround.

• BWXT has strong intermediate-term momentum to help weather overbought conditions, evident in the weekly stochastics, and long-term momentum has shown notable improvement, providing a bullish backdrop.

• Targeted resistance for BWXT can be defined by a Fibonacci retracement level near $62.50. A recent minor low near $54.10 can be used as a stop-loss level to manage risk inherent to bear market cycles.

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BWX Technologies (BWXT, $56.59):

Target: $62.50

Stop-Loss: $54.10