General Dynamics Stock Surges, But is it Overvalued?

On Tuesday, the Relative Strength (RS) Rating of General Dynamics stock was upgraded from 80 to 84. The RS Rating is a measure of market leadership on a scale from 1 to 99, which compares a stock’s price performance over the past 52 weeks to other stocks in the database. Top-performing stocks typically have an RS Rating of 80 or higher as they begin significant climbs.

General Dynamics stock has recently experienced growth in both earnings and sales, with EPS increasing from -7% to 2% and revenue rising from 6% to 8%. However, the stock is currently considered extended and out of buy range after surpassing a buy point of 245.06 in a saucer pattern with a handle. Investors should monitor if the stock forms another pattern or presents another buying opportunity such as a three-week tight consolidation or a pullback to the 50-day or 10-week line.

Within the Aerospace/Defense industry group, General Dynamics ranks 22nd among its peers. Other top-rated stocks in this group include Embraer ADR (ERJ), FTAI Aviation (FTAI), and Howmet Aerospace (HWM). Investors can use MarketSmith’s tools for individual investor analysis, IBD Live for daily stock market insights, SwingTrader for short-term trend profits, and IBD’s Growth Stocks tool for researching top-performing stocks with ease.