Blue Chip Hot List Alert (updated table)

Taking profits in Kratos Defense & Security Solutions (KTOS)

*The table in the initial email didn’t show KTOS moved to the “New Sells” section. It is corrected below.

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Taking profits in Kratos Defense & Security Solutions (KTOS)

Good morning,

Today, we’re taking profit in Kratos Defense & Security Solutions (KTOS). The bar for selling 52-week highs is very high but in my view, the risk/reward for continuing to hold is no longer in our favor.

Just a few examples of how extreme the move has become:

• The 3-year base target of $59 (highlighted yesterday in Stock Trends) is being hit this morning

• The 3-month rate of change is +84%, highest in the history of the stock

• The 10-day rate of change is +36%, second-highest reading ever

• The stock is 41% above its 50-DMA, second highest-reading ever, and now 91% above its 200-day, the highest ever

This doesn’t mean a major top is in or today is the top. The stock may very well continue on without us. But the stock is showing all signs of a blow-off move, and at least a 20% correction has followed all remotely similar conditions cited above. It will go down as an approximately 58% gain and 51% of outperformance vs. the S&P 500, in less than two months on the list.

Updated List