India-Pakistan conflict: F-16 fighter jet maker Lockheed Martin share price gives zero return in one month

India-Pakistan conflict: Shares of Lockheed Martin, the manufacturer of the F-16 fighter jets prized by Pakistan, have remained lacklustre over the past month, following Operation Sindoor. Lockheed Martin's share price had witnessed strong selling pressure on May 12 (Monday) after four days of military conflict between India and Pakistan. While the stock has rebounded since then, it remained unchanged in May. 

Even in the first few sessions of June, Lockheed Martin share price has remained rangebound, shedding 0.46% of its value.

Lockheed Martin stock has hogged the limelight after Pakistan deployed the F-16 fighter jet, along with J-10, drones and missiles in its four-day military conflict with India. But Pakistan's attempts were successfully thwarted by India's air defence and battle-proven systems. 

Analysts believe this could prove a setback for the American defence company as it could impact its order book.

Against this backdrop, Lockheed Martin, the US defence giant, has not moved much, generating almost nil returns for its investors. The stock edged up just 0.97% in May to settle the month at $482.38.

In April, the US defence stock had risen 6.95% after six straight monthly losses.

India-Pakistan conflict

Tensions between India and Pakistan had escalated after the Indian Armed Forces launched ‘Operation Sindoor’ in the early hours of May 7, targeting terrorist infrastructure in Pakistan and Pakistan-occupied Jammu and Kashmir (PoK).

This operation was a retaliatory response to the April 22 terror attack in Pahalgam, Jammu and Kashmir, which resulted in the deaths of 26 civilians, including one Nepali national.

“Even though the US gave F-16 fighter jets to Pakistan for other than war use, there are reports that Pakistan used Lockheed Martin Corp's F-16 and China's J-10 fighter jets during Operation Sindoor last month. However, neither could breach India's air defence system, which would be a massive setback for China and the US,” explained Avinash Gorakshkar, Head of Research at Profitmart Securities.

The market is expecting some hit on the order book of these defence companies in the upcoming quarters, said Goranshakr, explaining the weak returns in shares of Lockheed Martin.

Apart from Lockheed Martin, shares of AVIC Chengdu Aircraft have also faced a steep decline from their peak in May. The stock is down 20% from its May 12 high. The Chinese defence company manufactures the J-10 fighter jet.

Lockheed Martin share price target

Commenting on the technical outlook for Lockheed Martin share price, Ganesh Dongre, Senior Manager of Technical Research at Anand Rathi, said Lockheed Martin (LMT) has been consolidating within a well-defined range of $440 to $510 on the weekly chart, signalling a period of accumulation. Despite the sideways movement, the broader structure retains a bullish undertone, underpinned by the formation of a classic double-bottom pattern, which typically signifies a potential trend reversal to the upside, he added.

"Adding to the bullish sentiment, the weekly MACD indicator shows signs of bottoming out, suggesting waning bearish momentum and a possible shift in favour of the bulls," according to Dongre.

Dongre said that a decisive breakout and sustained close above the $510 level weekly would confirm the bullish breakout, potentially triggering a fresh upward wave. Post-breakout, the stock will likely aim for immediate upside targets in the $543 to $575 range, aligning with historical resistance zones and Fibonacci extension projections, as per the expert.

"In summary, Lockheed Martin is poised for a potential breakout, and a close above the $510 mark could act as a strong bullish catalyst in the coming weeks," Dongre said.

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