Lockheed Martin Corporation (LMT) shares were little changed on Friday, but they've had quite a run lately. The defense giant has rallied more than 10% since President Donald Trump floated large increases in defense spending.

Here's the thing though: the party might be winding down.

Lockheed is overbought and closing in on a resistance level that could act like a ceiling on the stock price. These technical dynamics make it worth watching closely right now.

Sure, plenty of investors focus exclusively on fundamentals like price-to-earnings ratios and other traditional metrics. And sometimes that's what drives stocks. But other times? Psychology and emotions run the show.

Take a look at what happened last February. Lockheed was sliding lower until shares hit the $405 level. Then they bounced and rallied hard.

When the stock fell back to $405 in July, it found support again at exactly the same spot. That's not a coincidence. It's human nature at work.

Think about what happened: traders who sold around $405 earlier watched the stock climb and immediately regretted their decision. So they made a plan. If the stock ever came back down to their selling price, they'd buy back in. When July rolled around and shares tested $405 again, those buy orders were sitting there waiting. That created support.

Now consider the flip side, which is what Lockheed might be facing right now. Back in October 2024, the stock touched around $595. People who bought at that peak have been underwater ever since, holding losing positions and probably feeling pretty lousy about it.

But if the stock climbs back to $595, those underwater buyers get a chance to escape at breakeven. They'll be ready with sell orders to exit their positions without taking a loss.

If enough of these sell orders pile up at that level, it creates resistance. The stock hits a wall. That's the risk Lockheed faces as it approaches this zone.

Smart traders know that earnings reports and fundamental news can absolutely move stocks. But they also recognize that emotions drive markets in powerful ways. Support levels hold because of seller's remorse. Resistance levels hold because of buyer's remorse. It's that simple, and that complicated.