Technical Analysis Snap: BAe drops a bombshell

On Thursday morning BAE Systems announced a loss of £70m on the six month period to the end of June, compared to a profit of £599m last year.It did however up its dividend and announced that it expects good growth for the full year. This announcement sent the share price crashing lower towards 5 year lows and long term support between 295p and 305p. Since its low of 93p at the end of 2002 BAE has enjoyed a fairly good performance, peaking at the beginning of 2007 at 519p, but since then has slipped back. It has so far managed to hold above its 50% Fibonacci retracement level at 306p and is currently again testing this support level. A close and break below 306p and the 294p low of the 28th October 2008 could well signal a deeper correction to the 61.8% Fibonacci level at 255p.While above the current support around the 300p level the market would expect to see a recovery in the share price. and a move back towards the highs of the year around 410p.For periodic TA updates follow me on TwitterAlso read my Investors Guide to Technical Analysis and Level 2 BAE Systems