2026 is bringing new opportunities to the defense industry.

Geopolitical tensions are surging in all corners of the world, from South America to eastern Europe to the Middle East. Even the faraway island – Greenland (population only 57,000!) – is being cast under the spotlight.

No wonder investors are piling into defense stocks, particularly UK listed groups.

Babcock International (UK:BAB), which I highlighted a few weeks back (see below), propelled through the overhead resistance at 1,300p.

Prices are affirming the long-term bull trend emphatically. As the stock sits at new cyclical highs, investors naturally look to large round number as upside targets. The first target is pencilled in at 1,500p.

Rolls Royce (UK:RR.) is another defence-related stock that broke out forcefully to the upside. The £100 billion company cracked through that 1,200p resistance this week.

Like BAB, there is no other visible technical block points. Hence, the near-term target is set at 1,300p, followed by higher round number levels, with the increment set at a distance of 100p.

Smaller arms stocks like Qineti (UK:QQ.) and Chemring (UK:CHG) also joined the sector-wide bounce. But their charts are less bullish for two reasons.

One, they are still trading at a distance beneath their 2025 highs. Two, whilst long-term bullish, their uptrends are far choppier. Their deep and sharp corrections often trigger investment stops.

Their short-term rally targets are viewed at 550p and 600p respectively.