I looked at the charts and indicators of Honeywell International Inc. (HON) towards the end of July. We had a bullish story noting that "HON has been in a strong uptrend. We have a nearby price target in the $140-$141 area but $150 is the next round number. Traders should stay long and raise sell stop protection to a close below $131."
Prices have passed our $140-$141 target and are closer now to the round number of $150. What sort of strategy is good now? Where would we recommend a sell-stop now? Let's get into the charts and indicators.
In this daily bar chart of HON, above, we can see the steady rise in the share price over the past 12 months. There are a number of sideways to higher consolidations along the way, and one shallow correction in March and April.
Aside from breaking the rising 50-day moving average line in April, the uptrend has been a work of beauty. I cannot really see that the volume of trading has expanded on the advance, but I can see that the On-Balance-Volume (OBV) line has been rising and confirming the price gains.
The trend-following Moving Average Convergence Divergence (MACD) oscillator has been above the zero line over the past year, except for October and early November and a short dip in April.
In this weekly bar chart of HON, above, we can see that prices are above the rising 40-week moving average line. The slope of the line has been positive for much of the past three years.
The weekly OBV line has been trending higher the past three years and signals aggressive buying and accumulation for an extended period of time. The weekly MACD oscillator has been in a bullish mode since November, and is turning up again to a fresh go long signal.
In this longer-term weekly Point and Figure chart of HON, above, we can see the straight up rise and a new longer-term price target of $219. Wow. Again $150 is a round number and so is $200.
Bottom line: because HON has taken its time and not rushed higher, we do not have the kind of overbought extremes seen on other stocks lately. Sell-stops could be raised to a close below $136 to try to lock in more gains. Stay long, and let's see how prices behave when we reach $150.
