TM Editors' note: This article discusses a penny stock and/or microcap. Such stocks are easily manipulated; do your own careful due diligence.

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A security pattern traces the distinct movements of security prices that, once recognized, help traders to make informed trading decisions. These patterns are identified by their vital geometrical elements, which are formed by changing security prices. Let's look at some stock opportunities in the aerospace & defense sector by analyzing these patterns.

Buy Signal for CAE Inc. (CAE) (Pennant)

The rising pennant (or bullish pennant) pattern looks like a pennant with a mast. It forms when rising prices experience a consolidation period. The price moves within a narrow range defined by the converging lines through points (2, ­4) and (3, ­5). After the consolidation period, the previous trend resumes.

This type of formation happens when anticipation of an uptrend is high, and when the price of a security consolidates within a range. It indicates growing investor interest in a potentially explosive uptrend.

Trade idea:

• Buy near the breakout (entry) price – $24.84.
• Sell at the target (exit) price – $27.43.

Trend trading is a strategy based on the technical analysis of changing market prices. The trend trader enters into a long position when a stock is trending upward and uses the short position when a stock is trending downward.

Buy Signals for Terran Orbital Corporation (LLAP) & Coda Octopus Group, Inc. (CODA)

Trade idea:

• Buy at the opening of the stock market on Monday if the opening price has gone up by no more than 0.5% of Friday's closing price.
• Sell after the price has risen by 2% from Friday's closing price, or at the end of the trading week if the target is not reached.

Buy Signal for L3Harris Technologies, Inc. (LHX)

Trade idea:

• Buy LHX at the current market price if seen as appealing.
• Sell LHX after receiving the "sell" recommendation from trusted analyses.

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