Thales Shares Surge 2.69% Boosted by Increased Defense Budgets

Geopolitical Tensions Fuel Thales' Rise

The strong performance of Thales this Monday occurs in a particularly tense geopolitical context. The entry into war by the Houthis, supported by Iran, and the deployment of additional US troops in the region fuel fears of an expansion of the conflict throughout the Middle East. Concurrently, the Brent crude has crossed the $115 threshold, up nearly 10% from last Friday's close, reflecting the magnitude of concerns about regional stability. In this context, the French defense technology group mechanically benefits from renewed attention to military budgets and security, especially since Prime Minister Sébastien Lecornu announced last week an increase in the budget for munitions. Thales, whose activities span defense systems, cybersecurity, and aerospace, sees its stock react positively. The SBF 120 is up 0.17% during the session, while the VIX, a volatility index measured at 27.44 at its last available closing (Thursday, March 26), already indicated a high level of tension in the markets.

Technical Rebound Brings Thales to a Pivotal Level

From a technical standpoint, today's rebound brings Thales to its 200-day moving average, located at 244.50 euros. The current price of 244.30 euros is thus at a pivotal level: a sustained crossing of this threshold would constitute a signal for the resumption of the medium-term trend, after several weeks of correction that saw the stock trading below its 20 and 50-day moving averages (at 246.81 and 252.13 euros, respectively). The RSI, at 40, indicates a zone still close to overselling, suggesting additional catch-up potential if market conditions remain favorable. Over the last three months, the stock has shown a performance of 7.57%, while the variation over one year is almost stable at -0.93%. The support identified at 236.40 euros played its role during the last phase of decline. The group's general assembly is scheduled for May 12, an event that could offer new perspectives on the group's strategy in a rapidly changing geopolitical environment.