Honeywell Set to Raise the Heat
- Posted by Greg Harmon
- on June 9th, 2016
Honeywell ($HON) operates a diversified technology and manufacturing company. It makes airplane engines and sophisticated avionics but it will always bring to thermostat to mind for me. And speaking of the thermostat, Honeywell’s stock price is about to turn up the heat.
The chart below shows how the stock price went through a broad consolidation and chop in 2015 before racing to new highs after the February bottom. But since making an all time high April 19th, it entered another consolidation phase, this one much tighter. A brief dip under the 50 day SMA in May and it is right back at the April high Thursday.
As it hits resistance at 116.50 there are 4 positive signs that it will break the consolidation to the upside and continue. The first is the RSI moving above 60 again, a higher high. The next is the MACD has crossed as it hit zero and is rising and positive now. Third is the Bollinger BandsĀ® opening to the upside. Finally and most important, the price itself is showing strong intraday action at it moves higher. A close at the top of the day Thursday will be a great sign of strength. A push and close over 116.56 can be used as a trigger.
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Gregory W. Harmon CMT, CFA, has traded since 1986 and held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)