One defense stock has fallen so far it's attractive for a short-term bounce and longer-term, Jay Woods says

The recent move in Lockheed Martin ( LMT ) was a classic "buy the rumor, sell the news" story. The initial attack on Iran started on Saturday February 28 and the peak in the stock was literally the first trading day after the conflict started, Monday, March 2. Since then, shares have traded lower by over 28% and are now nearing key technical support levels that make the stock look very interesting for both a short-term bounce as well as a potential longer-term entry point. Fundamentally, there is talk of a supply shortage and a need to bolster military supplies and do so quickly. Defense spending may be a hot button election issue, but it tends to be one that both sides of the aisle rarely neglect. While a basket of stocks in thegroup is never a bad idea for diversification — you can use the iShares U.S. Aerospace & Defense ETF ( ITA ) to achieve that goal — Lockheed Martin is one stock in this sector that is providing clear strategic areas to trade now. The Setup On the one-year daily chart we see a classic Technical Analysis 101 pattern. It is the full life cycle of a trade. Consolidation, a breakout, a rally, nice topping and reversal pattern followed by a targeted sell-off. From that head-and-shoulders topping formation, we had downside targets that were $90 below the $600 neckline. That target of $510 was achieved, stopping right at a major consolidation area where prior resistance is now acting as support. …