Shares of US defence firms gain before the US open

Shares of companies in the military sector are gaining before the US market opens. General Dynamics (GD.US), Kratos (KTOS.US), Northrop Grumman (NOC.US) and Lockheed Martin (LMT.US) are set to open today with at least a few percent upside gap. 

The policy of Western countries towards Russia is tightening, with more EU member states pledging to supply various weapons and ammunition to stop the occupying forces in Ukraine. Russia has also been disconnected from the SWIFT system and its economy is increasingly isolated. The risk of a return to the 'Cold War' and the closure of Russia to the West is increasing. As we all know, the Cold War meant an arms race in the past, which resulted in huge contracts for, among others, the US defence and space sectors. 

The investment bank Goldman Sachs has also published a list of companies that could benefit from the tense international climate and the ongoing war in Ukraine. Investors are clearly beginning to see the potential in shares of companies providing the military and intelligence companies with the latest technologies and advanced weaponry.

The stock of Maxar Technologies (MAXR.US), which had been moving in a long-term downtrend until the outbreak of the conflict in Ukraine, is also gaining in the pre-opening phase. With its own satellite system, the company provides real-time satellite imagery from anywhere on Earth. The images provided by Maxar contain key strategic information for intelligence agencies and show the exact location and number of troops, changes in the concentration of forces, their mobility or logistical facilities.

The company has entered into a partnership with Aurora Insight, which deals with advanced radio wave technology through ground and satellite sensors that are important to intelligence agencies. Aurora's management conveyed that the partnership with Maxar will allow it to provide the most advanced services of its kind, in the upcoming 5G internet era.

In 2020, Maxar acquired Vricon, a global leader in 3D satellite data for defence and intelligence, for $130m. The company is also active in robotics and advanced components for defence or NASA. The company has remained in the shadows for a long time, but the new global situation may ensure that its strategic importance increases, including for NATO. 

Maxar Technologies (MAXR.US) quotes have recently been moving in a downward wedge. Looking at the D1 chart, quotations did not manage to break out of the mentioned formation. Reduction stopped at the level of 23.00, which additionally allows us to deal with a double bottom. A sustained breakout above the level of 28.70 may contribute to the acceleration of the upward movement. Source: xStation 5