L-3 Communications (May 14, 2007)
L-3 Communications Titan (LLL) is in the defense industry and is also a favorite of Jim Cramer’s. But Jim is bullish on it because of who else is bullish — members of the Board of Directors.The stock is featured in Stockpickr.com’s list of Insider Purchases and Buybacks. Two board members have made significant purchases of the stock, despite the fact that it’s at all-time highs. A total of 55,000 shares have recently been bought, with the highest price being $87.20 — just about 8% lower than current trading levels.
The stock continues to look strong technically, so let’s look at the daily chart.
I’ve highlighted several layers of potential support. First, the very short-term support level that was established by last week’s gap above $94. But the more reliable areas of support lie lower — down below the April $92 high, as well as down below $90.
RSI shows that the uptrend is actually picking up steam, with the lower edge of the channel now sitting around the midline. But it’s important to remember one of the more significant arguments in favor of higher prices — it’s not the price trend, it’s the buying of the stock buy insiders. And I doubt that these insiders look at charts. Instead, they look at the fundamental prospects of the company. As such, we really need to keep more of a longer-term perspective on this stock. For a multi-period analysis, from monthly down to daily, please check out this video.