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  1. Home
  2. / Investing

Honeywell Looks Ready for a Rally

Let's see how traders are positioned ahead of Thursday's earnings.
By BRUCE KAMICH
Apr 25, 2023 | 09:28 AM EDT
Stocks quotes in this article: HON

Honeywell International Inc. (HON) is expected to report earnings on Thursday before the market opens. After the close of trading Monday the company disclosed that its board authorized the repurchase of as much as $10B of its common stock, including approximately $2.1B remaining under its previously announced $10B buyback program. HON is trading higher in early action Tuesday.

Let's check out the position of the charts and indicators to see how traders might be positioned.

In the daily bar chart of HON, below, I can see that the shares have behaved on the weak side recently but the indicators have been relatively strong. HON declined from early December to the middle of March. The stock spent about eight weeks trading below the 200-day moving average line but it is back above it now. The slope of the 200-day line has remained positive. HON is trading above the declining 50-day line.

The On-Balance-Volume (OBV) line has stayed steady as a rock since December despite the price decline. This tells me that HON "fell of its own weight" and traders were not aggressive sellers of the stock. The Moving Average Convergence Divergence (MACD) oscillator has edged above the zero line recently for an outright buy signal.

 
 
In the weekly Japanese candlestick chart of HON, below, I see a bottom reversal pattern on the candles in March. The shares are trading around the rising 40-week moving average line.
 
The weekly OBV line made a long decline but reversed direction in September. The MACD oscillator is just slightly below the zero line and close to a fresh outright buy signal.
 
 
In this daily Point and Figure chart of HON, below, I can see a potential upside price target of $223.
 
 
In this weekly Point and Figure chart of HON, below, I can see a $227 price target.
 
 
Bottom-line strategy: I have no special knowledge of what Honeywell will tell shareholders and fundamental analysts on Thursday, but the charts and indicators suggest to me that we could see price gains in the weeks ahead. Risk to $191 on new longs.
 
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TAGS: Investing | Technical Analysis | Technology | Industrials | Earnings Preview

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