When I last reviewed Honeywell International Inc. (HON) in the middle of June, I wrote that, "If you have been on the sidelines of HON, now is your chance to get in again. HON is showing strength on all three of our charts. Traders could go long here and on strength above $154. The $175-$180 area is my new price target. I would risk below $145 for now."
Action Alerts PLUS holding HON has firmed in recent days and closed above the highs from April, May and June. The stock is above $154 so I will assume some readers of Real Money have gone long. Let's check and see what may have changed in the past few weeks.
In this updated daily bar chart of HON, below, we can see how prices have rallied above the rising 50-day moving average line and the bullish 200-day moving average line. There is still some chart resistance above $155 to $165 from January and early February but it doesn't look like it will prevent prices from moving higher.
The daily On-Balance-Volume (OBV) line has been very steady the past six months as prices corrected lower. A steady OBV line when prices decline suggests that traders and investors largely did not liquidate long positions when prices corrected.
The trend-following Moving Average Convergence Divergence (MACD) oscillator recently moved back above the zero line for an outright go long signal.
In this weekly bar chart of HON, below, we have a bullish set up with the indicators. Prices are above the rising 40-week moving average line. The weekly OBV line has make a new high for the move up and this may be foreshadowing an upside breakout above $165 in HON.
The weekly MACD oscillator is just above the zero line and poised for a fresh outright go long signal.
In this Point and Figure chart of HON, below, we can see the bullish pattern with a longer-term price projection of $182.56. A trade at $157.05 will be a fresh upside breakout.
Bottom line: There are enough bullish signals on HON to give traders and investors confidence in the long side. Go long HON around current levels and consider adding to longs on a move above $157.05. Risk a close below $149 looking for gains to $165 and then the $180-$185 area.