Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of defense contractor and business jet maker Textron (NYSE: TXT) got a 10% boost in intraday trading Friday on news that rival aerospace firm United Technologies (NYSE: UTX) is raising cash to make a big acquisition.

So what: Rumor has it that UTC is lining up creditors to support a $20 billion purchase offer -- which makes Textron's leap all the stranger given that its market cap today is only $5 billion.

Now what: Is United Tech planning to pay a 400% premium to Textron's market cap? That would certainly be nice -- but not likely. So who is UTC planning to buy? Boeing's (NYSE: BA) too big; L-3 (NYSE: LLL) too small. General Dynamics (NYSE: GD) looks just about right, sizewise -- but if UTC's planning a hostile takeover, they'd better watch out. General D has tanks ...

My best guess is Raytheon (NYSE: RTN) or Northrop Grumman (NYSE: NOC), which carry $15 billion-ish market caps, and a decently size takeover premium could take either to $20 billion easily.

Valuation aside, what company makes the most sense for UTC to buy? Add it to your watchlist, and read along as we discuss the question.