We reviewed the charts of Honeywell (HON) back on June 22 and the charts looked promising - "Aggressive traders could go long HON at current levels risking to $199. The $300 and $347 areas are our new price targets." Unfortunately the rally fizzled in August and prices have weakened. Let's check the charts again.
In this updated daily bar chart of HON, below, we can see that prices have not hit our sell stop but they have turned soft. HON is trading below the declining 50-day moving average line and below the flat 200-day moving average line.
The On-Balance-Volume (OBV) line shows weakness from late July as selling has become more aggressive. The Moving Average Convergence Divergence (MACD) oscillator is below the zero line.
In this weekly Japanese candlestick chart of HON, below, we see a weakening picture. The most recent candlestick pattern shows an upper shadow as traders rejected the highs. Prices have traded around the flat 40-week moving average line.
The weekly OBV line has been in a decline since December. The MACD oscillator has been weakening since January and is close to the zero line.
In this daily Point and Figure chart of HON, below, we can see that the software is projecting a possible downside price target in the $188 area.
Bottom line strategy: Traders who are long HON may want to liquidate those positions as the charts are not encouraging at this point in time.
