Will Honeywell Get Sticky to the Downside?
As the stock dips lower in the premarket is it setting up for a bargain buy or a trap? Let's check the charts.
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Honeywell International Inc., HON is an industrial goods and machinery company and its charts look weak Thursday morning. The company beat on it top-line and bottom-line estimates and revised its fiscal 2024 outlook.
Let's go back to the charts and indicators.
I can see that prices are likely to retest the rising 50-day moving average line today. The $205 area or zone may provide some chart support so we should not get too bearish too soon. The On-Balance-Volume (OBV) line has moved higher since October and tells me that buyers of HON have been more aggressive than sellers. The trend-following Moving Average Convergence Divergence (MACD) oscillator has been correcting lower since late June but is still above the zero-line.
In this weekly Japanese candlestick chart of HON, below, I can see a number of recent upper shadows on the candles telling me that traders have been rejecting the highs for several weeks ahead of earnings this morning.
The OBV line has been in a downward drift the past three years - a different view than the daily OBV line. The slope of the 40-week moving average line is positive. The MACD oscillator is in a bullish alignment above the zero-line, but is likely to narrow in the days ahead.
In this daily Point and Figure chart of HON, below, I can see an upside price target in the $281 area. Thursday's pullback is not posted yet.
In this weekly Point and Figure chart of HON, below, I can see that the software is projecting an upside price target in the $277 area.
Bottom line strategy: HON looks poised for a pullback or correction. The big question is whether this is a dip to buy or to avoid. Let's stay on the sidelines for a few days or longer to see if support develops or gives way.
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