Is United Technologies Ready to Bounce Back?

A = A-Level Management Runs the Company

While UTX management’s cost cutting efforts merit praise, the recent shareholder lawsuit does not exactly instill confidence in the hearts of potential investors. While the suit itself might be without merit as the company contends, there is no denying the core issue in the suit. United Technologies was fined for supplying China with software needed to make attack helicopters. The suit seeks to remove the board of directors; an unlikely outcome. However, A Level Management should be able to deal with foreign customers without violating US law.

T = Technicals on the Stock Chart are Strong

The technicals for UTX have been relatively weak all year with multiple crosses above and below the 20 Day, 50 Day, and 200 Day Simple Moving Averages. As of November 13th 2012 the stock price is 0.87 below its 20 Day SMA; 1.98% below the 50 Day SMA; and 6.19% below the 200 Day SMA.

S = Support is Provided by Institutional Investors & Company Insiders

UTX is 83% institutionally owned, far surpassing fellow Dow Component GE’s 55%. The top five holders are Vanguard, Fidelity Investments, Massachusetts Financial Services, BlackRock Institutional Trust, and Capital Research Global Investors.