We're starting to see a glimpse of what the post-Covid world will look like and it looks fantastic, Jim Cramer told his Mad Money viewers Monday evening. With the news that we could soon have three vaccines that are more than 90% effective, investors should start making their list of "return-to-normal" stocks they can buy on any future market weakness. Cramer suggested Honeywell (HON) should be on the shopping list.
Let's check out the charts.
In this daily bar chart of HON, below, we can see that prices have doubled from their March nadir. Impressive. Prices are trading above the rising 50-day moving average line and above the now rising 200-day moving average line. A bullish golden cross of these two key averages can be seen back in September.
The On-Balance-Volume (OBV) line has moved higher from March to confirm the price gains as a rising OBV line tells us that buyers of HON have been more aggressive.
The Moving Average Convergence Divergence (MACD) oscillator is bullish but has narrowed towards a potential take profits sell signal.
In this weekly Japanese candlestick chart of HON, below, we can see some upper shadows in the price action as it approaches $210. There is an upside price gap and prices are above the rising 40-week moving average line.
The weekly OBV line has made a new high for the move up and the MACD oscillator is in a bullish alignment.
In this daily Point and Figure chart of HON, below, we used daily price data. A trade at $212 will refresh the uptrend and could open the way for gains to the $300-$305 area.
Bottom line strategy: We last looked at HON on August 26 and recommended that "Traders and investors could go long HON or add to longs at current levels. Risk a close below $154 for now. $193 and then $257 are our price targets." Now that our $193 price target has been reached and exceeded traders could raise stop protection to $194 to lock in gains. The $257 area and then the $300-$305 area are the price targets now.