Mapping the market: Retreating US defense stocks could be headed for a turn higher
ITA•The iShares US Aerospace & Defense ETF (ITA) fell as much as 18.2% from its August 14 record closing high of $253.22. Its 9-week RSI ended at 30.2, near the oversold threshold, as technical analysts watched for a possible pause or turnaround.
1. Defense ETF declines
ITA has fallen as much as 18.2% from its August 14 record closing high of $253.22, bringing it close to the 20% decline commonly used to define a bear market. In September, the ETF recorded its largest monthly decline since March and its worst quarterly drop since the first quarter of 2020. It also posted a seventh straight weekly decline, its longest such streak in data going back to 2006.
2. Oversold threshold in view
At Friday’s close of $207.79, ITA’s 9-week Relative Strength Index was 30.2, near the 30 level that indicates oversold conditions. Sharp reversals after weekly RSI readings below 30 have often coincided with important price lows over the past decade, though the RSI fell as low as 9.4 during the COVID-driven market collapse before turning higher.
3. Levels to watch
A move above the $209.31 to $211.82 area, corresponding to March and April lows, could increase expectations of a recovery toward the 40-week moving average, which ended Friday near $231. The ETF’s record high of $256.60 could then become a focus. If it continues to decline, the next significant support is the November 2025 trough at $195.71.
