4 Trade Ideas for Honeywell: Bonus Idea

Here is your Bonus Idea with links to the full Top Ten:

Honeywell, $HON, comes into the week moving back higher after a retest at the 38.2% retracement of the post pandemic move higher. This follows a pullback after breaking the 200 day SMA for the first time since November 2021. Price is now approaching resistance with the RSI rising back at the midline and the MACD turning towards a cross higher. A Measured Move comparable to that off the 50% retracement gives a target to 220.

There is resistance higher at 193 and 179.50 then 200.75 and 204 before 206.50 and 211 then 214 and 220. Support lower comes at 189 and 185. Short interest is low under 1%. The stock pays a dividend with an annual yield of 2.04% and has traded ex-dividend since August 11th. The company is expected to report earnings next on October 20th.

The September options chain shows biggest open interest this week at the 200 put and at the 210 then 200 call strikes. In the October chain open interest is spread from 200 down to 170 on the put side and from 190 to 220 on the call side. The December chain has biggest open interest at the 190 and 180 puts, and at the 200 call.

Honeywell, Ticker: $HON

Trade Idea 1: Buy the stock on a move over 193 with a stop at 185.

Trade Idea 2: Buy the stock on a move over 193 and add an October 190/185 Put Spread ($2.00) while selling the December 220 Call ($1.05).

Trade Idea 3: Buy the October/December 210 Call Calendar ($2.50) and sell the October 180 Put ($2.25).

Trade Idea 4: Buy the December 175/195/210 Call Spread Risk Reversal ($1.85).

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After reviewing over 1,000 charts, I have found some good setups for the week. These were selected and should be viewed in the context of the broad Market Macro picture reviewed Friday which heading into the September Quadruple Witching and Index Rebalancing week, saw equity markets showed strength with a rebound solid three day move higher to end the week.

Elsewhere look for Gold to pause in its pullback while Crude Oil tries to reverse higher. The US Dollar Index continues in the uptrend while US Treasuries continue their downtrend. The Shanghai Composite looks to consolidate while Emerging Markets move to new lows. The Volatility Index looks to pull back towards the normal zone making the path easier for equity markets to the upside.

Their charts showed some strength, especially on the longer timeframe with bullish engulfing candles. On the shorter timeframe the SPY, IWM and QQQ may have just confirmed higher lows after the higher highs in August. Continuation to the upside and through the August high would confirm an intermediate trend reversal higher. Use this information as you prepare for the coming week and trad’em well.

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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