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 with a move over the 200 day SMA and at resistance. The Bollinger Bands® are opening higher to allow a move up. In an interesting twist it just printed a Death Cross, with the 50 day SMA crossing down through the 200 day SMA. Despite this the RSI is rising into the bullish zone with the MACD turning positive as price rises off a 61.8% retracement of the last leg higher.

There is resistance at 197.75 and 199.25 then 202 and 205 before 209.50 and 212 then 217. Support lower sits at 193 and 190. Short interest is low under 1%. The stock pays a dividend with an annual yield of 2.10% and has traded ex-dividend since February 23rd. The company is expected to report earnings next on April 27th.

The April 28 Expiry options chain has largest open interest at the 185 and then 190 put strikes. On the call side it is biggest at 197.50. In the May options open interest is spread from 195 to 180 on the put side, biggest at the 190 strike. On the call side it is focused at the 210 strike. Finally, the June options chain shows open interest spread from 210 to 165 and biggest at the 190 put. The June calls show open interest spread from 190 to 260 with a plateau from 210 to 230.

Honeywell, Ticker: $HON

Trade Idea 1: Buy the stock on a move over 197.75 with a stop at 192.75.

Trade Idea 2: Buy the stock on a move over 197.75 and add a April 28 Expiry 192.50/185 Put Spread ($1.60) while selling the May 12 Expiry 205 Calls ($1.50).

Trade Idea 3: Buy the April 28 Expiry/May 26 Expiry 205 Call Calendar ($1.80) while selling the April 28 Expiry 185 Puts ($0.70).

Trade Idea 4: Buy the June 185/200/210 Cal Spread Risk Reversal (80 cents).

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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 April options expiration week, saw equity markets showed resilience holding up despite a building narrative of a possible recession.

Elsewhere look for Gold to continue its uptrend while Crude Oil has a short term move higher in consolidation. The US Dollar Index continues to drift to the downside while US Treasuries pullback in their consolidation. The Shanghai Composite and Emerging Markets look to continue in consolidation.

The Volatility Index looks to remain low and stable making the path easier for equity markets to the upside. The charts of the SPY and QQQ remain strong on the longer timeframe while on the shorter timeframe both the QQQ remains in short term consolidation while the SPY is breaking higher. The IWM remains weaker holding in consolidation after a failed short term move 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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