Lockheed Martin Surges 3.2% on Hypersonic Breakthrough and Bullish Technicals: Is This the Start of a New Rally?

Summary
• Lockheed Martin (LMT) surges 3.2% to $576.24, hitting its 52-week high of $578.02
• GE Aerospace collaboration unveils liquid-fueled rotating detonation ramjet for hypersonic missiles
• Options chain shows 20 contracts with 113%-365% price change ratios and 22%-73% leverage ratios
• Technicals signal bullish momentum: RSI at 76.14, MACD 19.10, and 200D MA at $468.87

Lockheed Martin’s stock is surging on the back of a groundbreaking propulsion technology partnership with GE Aerospace and robust technical indicators. The 3.2% intraday gain, driven by a 52-week high and a 149M turnover, signals strong institutional interest. With options showing leveraged call options surging 113%-365% and technicals pointing to a bullish breakout, the defense giant is capturing market attention.

Hypersonic Propulsion Breakthrough Ignites Investor Optimism
Lockheed Martin’s 3.2% surge is directly tied to its collaboration with GE Aerospace, which demonstrated a liquid-fueled rotating detonation ramjet engine. This technology promises to reduce missile production costs, increase range, and enable hypersonic speeds. The compact design and fuel efficiency align with U.S. defense priorities, particularly in an intensifying global threat environment. The test results, exceeding expectations, validate Lockheed’s expertise in advanced propulsion systems and position it to capture a larger share of the $1.5 trillion defense budget proposed under President Trump. Analysts highlight that this innovation could accelerate production timelines and reduce operational costs, making the stock a focal point for investors betting on defense sector growth.

Aerospace Sector Rally: NOC Up 4.4%, LMT Outperforms Peers
The aerospace sector is rallying on Trump’s $1.5 trillion defense budget proposal, with Northrop Grumman (NOC) up 4.4% and RTX Corporation (RTX) gaining 1.36%. However, LMT’s 3.2% surge outperforms peers due to its exclusive hypersonic propulsion breakthrough. While competitors like Boeing (BA) and General Dynamics (GD) trade flat or lower, LMT’s 52-week high and 200D MA crossover ($468.87 vs. $576.24) suggest stronger near-term momentum. The sector’s focus on hypersonic capabilities and cost-efficient systems positions LMT as a key beneficiary of the proposed budget expansion.

Leveraged ETF and Call Options Playbook: Capitalizing on LMT’s Bull Run
• 200-day average: $468.87 (well below current price)
• RSI: 76.14 (overbought)
• MACD: 19.10 (bullish divergence)
• Bollinger Bands: Price at $576.24 vs. upper band $551.79 (overextended)
• Leveraged ETF: Direxion Daily LMT Bull 2X ETF (LMTL) up 6.42%

LMT’s technicals suggest a continuation of the bullish trend, with the 200D MA acting as a strong support. The Direxion Daily LMT Bull 2X ETF (LMTL) offers 2X leverage for aggressive exposure, while call options with high leverage ratios and moderate deltas provide amplified returns. Two top options:

• LMT20260123C570
- Strike: $570, Exp: 2026-01-23, IV: 28.93%, Leverage: 38.97%, Delta: 0.6096, Theta: -1.0985, Gamma: 0.013884, Turnover: 264,827
- IV (Implied Volatility): Indicates moderate volatility expectations
- Leverage: Amplifies returns on price moves
- Delta: Sensitive to price changes but not overexposed
- Theta: Strong time decay (favorable for short-term holding)
- Gamma: High sensitivity to price movement
- Turnover: High liquidity ensures easy entry/exit
- Payoff at 5% upside (576.24 → 605.05): $35.05 per contract
- Why it stands out: High leverage and liquidity make it ideal for a 5%-10% rally before expiration.

• LMT20260123C575
- Strike: $575, Exp: 2026-01-23, IV: 29.13%, Leverage: 47.66%, Delta: 0.5381, Theta: -1.0581, Gamma: 0.014271, Turnover: 139,051
- IV: Slightly higher than 570 call, reflecting stronger demand
- Leverage: Highest in the chain for maximum amplification
- Delta: Balanced sensitivity to price movement
- Theta: Strong time decay (favorable for short-term holding)
- Gamma: High sensitivity to price movement
- Turnover: High liquidity ensures easy execution
- Payoff at 5% upside: $30.05 per contract
- Why it stands out: Combines high leverage with moderate delta for a controlled risk-reward profile.

Trading Setup: Key support at $556.12 (intraday low) and resistance at $578.02 (52-week high). A break above $578.02 could trigger a retest of $580, with the 200D MA acting as a floor. Aggressive bulls should consider the LMT20260123C575 for a 5%-10% rally, while the LMTL ETF offers a safer, leveraged alternative. Watch for a pullback to $556.12 as a potential entry point.

Backtest Lockheed Martin Stock Performance
The backtest of Lockheed Martin (LMT) following a 3% intraday surge from 2022 to the present shows mixed results. While the 30-day win rate is 100%, indicating all 30-day periods tested resulted in a positive return, the 3-day win rate is 0%, suggesting some volatility in the short term. The maximum return during the backtest was 21.18%, which occurred on day 59, highlighting a potential for strong performance but also the need for patience as it took several days to achieve this maximum return.

LMT’s Hypersonic Momentum: Time to Ride the Wave or Wait for a Pullback?
Lockheed Martin’s 3.2% surge is a clear signal of institutional confidence in its hypersonic propulsion breakthrough and the broader defense budget tailwinds. With technicals showing overbought RSI and a 200D MA crossover, the stock is in a strong bullish phase. The options chain, particularly the LMT20260123C575 and LMT20260123C570, offers amplified exposure for those betting on a continued rally. Meanwhile, the sector leader NOC is up 4.44%, reinforcing the aerospace sector’s strength. Investors should monitor the $556.12 support level and consider the Direxion Daily LMT Bull 2X ETF (LMTL) for leveraged gains. Action now: Buy the LMT20260123C575 for a 5%-10% rally or the LMTL ETF for a safer, leveraged play.