To The Moon

$Howmet Aerospace Inc.(HWM)$ $Palantir Technologies Inc.(PLTR)$ $Heico(HEI)$ I'm calling this the most dangerous setup in aerospace right now. $HWM has delivered 64% YTD gains, but the chart is screaming bear flag breakdown, liquidity flush, and a credibility reset unless buyers defend 170 with conviction.

$HWM is flashing a liquidity flush while Trump just pumped aerospace higher, is this the credibility reset no one wants to admit?

Chart Breakdown

I’m tactically cautious on $HWM after a near-vertical run that now carries a bear-flag breakdown risk. Best of breed in aerospace and defense and an IBD Top 50 name, but the daily shows a failed push to reclaim prior channel highs with a close at 181.06. The 4H view prints Keltner and Bollinger compression with price at 171.05 and clear momentum loss. Weekly trend remains constructive at 171.25, yet the immediate tape looks like a liquidity flush, not fresh ignition. Support sits at 170, then 160 and 152. Resistance sits at 178 and 193.26, the 52-week high. MACD has turned negative on the daily and RSI has slipped beneath 50, so I’m extremely confident this signals exhaustion unless buyers reclaim 178 with real volume.

Earnings Snapshot

Revenue was 2.05B, up 9% YoY. Operating income margin reached 25.4%, +420 bps. Net income was 407M, or 1.00/share. Adjusted EPS came in at 0.91, up 36%. Adjusted EBITDA was 589M, up 22%. Free cash flow hit 344M, a Q2 record. Share repurchases totaled 175M at an average price of 142.36 during the quarter, with an additional 100M at 182.90 in July. Dividend was raised 20% to 0.12/share. CEO John Plant underscored the backdrop: “Aircraft backlogs are extraordinarily high due to prior period underbuilds and the need for modern fuel and emissions-efficient aircraft to replace the increasingly aged fleet.”

Segment Revenues

Engine Products revenue came in at 1.1B, up 13% with an adjusted EBITDA margin of 33%. Fastening Systems generated 431M, up 9% with a 29.2% margin. Engineered Structures delivered 290M, up 5% with margin expansion of +690 bps to 21.4%. Across segments, commercial aerospace rose 8%, defense advanced 21%, and industrial & other climbed 17%, offset by a 4% decline in commercial transportation. The setup reflects multi-vector strength that contrasts sharply with the chart’s tactical weakness.

Flow & Institutional Moves

On 13Aug25, $HWM fell 2.27% to 176.80 while the S&P 500 gained 0.32% to 6,466.58 and the Dow added 1.04% to 44,922.27, leaving the stock 8.52% below its 52-week high of 193.26. Competitors moved higher the same day with BRK.A up 1.53% to 715,490.41, BRK.B up 1.47% to 477.31, and TDG up 1.07% to 1,425.81. Trading volume was 3.2M, about 63,488 shares under the 50-day average. Insider activity included a Form 4 filing on 05Aug25 by Lola Felice Lin disclosing a disposal of common shares.

Options flow into the 22Aug expiry showed heavy downside interest: the 170 puts traded at 2.40 on 533 contracts, up 130%; the 172.5 puts at 3.55 on 23 contracts, up 151.68%; the 175 puts at 4.65 on 43 contracts, up 100%; the 177.5 puts at 6.90 on 67 contracts, up 77.92%; and the 180 puts at 8.60 on 27 contracts, up 77.98%.

The Greeks confirmed the skew, with deltas stretching from –0.202 at the 165 strike to –0.932 at 185, alongside rising vega across mid-strikes. Theta decay was steepest in the 170–172.5 range, highlighting the cost of hedges. Short interest as of 15Aug25 stood at 9.25M shares with a short ratio of 20.18%. Daily short volume was 658.7K, split between 125.9K on NASDAQ and 532.8K on NYSE, against total turnover of 3.27M shares.

Liquidity flush dynamics are clearly in play, with heavy put activity, insider selling, and relative underperformance versus peers pointing to tactical exhaustion.

Valuation Check

Year to date, $HWM is up 64% and has gained 84.9% over the past year, crushing the S&P 500 at +17% and the aerospace peer group at +21.9%. Current valuation is stretched with a P/E of 51.7 and a P/S of 39.8. The stock is priced for perfection, with little margin for error. Buybacks provide a cushion, but the setup looks like a credibility reset waiting to happen.

Analyst PTs & Sentiment

Twenty analysts have an average target of 198.50, implying +15.91% upside, with a range between 145 and 225. Current price sits at 171.25, with historical average upside of 2.98%. Recommendation data from 26 analysts shows 27% Strong Buy, 50% Buy, and 23% Hold, with 0% Sell. JPMorgan reaffirmed Overweight and raised its PT to 190 on 04Aug25, Bernstein lifted its PT to 217 citing strong margins, and Barclays has maintained a cautious stance.

Macro and Peer Context

HWM leads August picks with 64 % gains in 2025 from aerospace demand. The month’s standout set includes Amazon with e-commerce and AWS strength, Nvidia on AI-chip leadership, Microsoft on cloud and AI applications, and Mastercard on digital payments scale. Within the broader S&P 500 winner cohort, HWM sits alongside PLTR, GEV, NEM, STX, NRG, EBAY, GE, IDXX, APH, TPR, UBER, CVS, DLTR, JBL, ORCL, SMCI, DG, AMD, HAS, CEG, MU, VST, TEL, HII. Social and web sentiment as of 17Aug NZST shows active retail engagement and rotating headlines focused on raised guidance and backlog strength; Stocktwits remains constructive despite near-term technical fatigue.

Trump’s executive order to relax supervision of the aerospace industry has ignited a wave of speculative optimism, with names like Rocket Lab and ASTS catching a bid. But HWM isn’t riding that wave, instead it’s diverging hard, flashing a bear flag breakdown and liquidity flush behavior that signals a credibility reset even as the sector cheers policy relief.b

My Trade Plan

I'm not chasing a stretched name into a credibility reset. Below 170 on confirmed volume I will consider a tactical put or short swing with targets at 160 and 152. If buyers reclaim 178 with expanding volume and a daily MACD bull cross, I will look at a measured long toward 193–198. Options positioning and Greeks skew support a defensive near-term posture while the weekly trend remains intact. This is a disciplined setup where patience and precision matter more than speed.

Conclusion

This isn’t divergence; it’s detachment. I’m betting this fades or moves into a multi-week base before attempting new highs. The backlog narrative and segment margins are real, but price needs a reset. I welcome pushback; prove me wrong with a sustained close above 178 and a momentum thrust that holds.

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