SubscribeMilitary Spending on the Rise?
Profiting from the next arms race…
Well, it looks as if U.S. involvement in Iraq and Afghanistan will continue for many years to come. Investments in military equipment upgrades are growing faster than ever. Over $646 billion have been spent in these regions from 2001-2007. And get this: By 2017, total military expenditures are estimated to reach as high as $2.7 trillion!
China knows that our military capabilities are largely dependent on real-time ground and space communications and are already allocating the funds necessary to modernize their own defense. We’re looking at a Chinese military budget that will swell 17.8 percent to just under $45 billion – which guarantees that the U.S. will act to thwart an attempt by any nation to hit its Achilles heel.
Defense plays could be a potent focus for investors in the months and years ahead. In the one-year chart of FSDAX above, we have a wedge formation, which could also be viewed as a head and shoulders charting pattern. In the next few weeks, we’re likely to witness a bullish double bottom around $77.
Look to buy in on the breakout to the upside above the upper trendline drawn near $80 for solid gains.
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