Fundamental analysts following Honeywell (HON) have different views with one sell-side firm boosting their price target to $225 while another firm cut their recommendation to neutral with a $194 price target. Let's check out the charts and indicators of this industrial company.
Our last review of HON was back on March 15 when we wrote that "Unfortunately I am not finding the charts nor the indicators on HON bullish enough to warrant a buy recommendation. Avoid the long side of HON for now. We are likely to get a better buying opportunity in a few months."
Let's see what's happening now.
In this daily bar chart of HON, below, we can see that prices traded down into July. HON rallied sharply into the middle of August and then corrected back down to retest the July nadir and make a potential double bottom. Prices rallied up into late October and crossed above the 50-day and 200-day moving average lines. The 200-day line is still in a downtrend but the 50-day line is starting to bottom.
The On-Balance-Volume (OBV) line has made lows in July and October telling us of a shift from aggressive selling to aggressive buying. The Moving Average Convergence Divergence (MACD) oscillator is bullish now that it has crossed above the zero line.
In this weekly Japanese candlestick chart of HON, below, we can see a large white (bullish) candle that clearly breaks above the 40-week moving average line. The weekly OBV line shows us a two-year decline and implies major long-term liquidation (selling). The MACD oscillator is bearish but has generated a cover shorts signal.
In this daily Point and Figure chart of HON, below, we can see that price just about reached a price target in the $203 area.
In this weekly Point and Figure chart of HON, below, we can see a price target in the $271 area.
Bottom line strategy: Shares of HON have made a strong run to the upside. A pullback/correction should be the next move.
