4 Trade Ideas for Honeywell: Bonus Idea

• Posted by Greg Harmon
• on May 1st, 2023

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

Honeywell, $HON, comes into the week making a 2 month high and looking to clear resistance. It is rising along the Bollinger Bands® after retracing 61.8% of that last leg higher. The RSI is pushing higher in the bullish zone with the MACD positive and turning higher to avoid a cross down. There is resistance at 200 and 204 then 207.50 and 209.75 before 212 and 216. Support lower comes at 196 and 192.25. Short interest is low under 1%. The stock pays a dividend with an annual yield of 2.06% and the stock will trade ex-dividend beginning May 11th.

The company is expected to report earnings next on July 26th. The May options chain shows biggest open interest at the 180 put strike and the 210 call. In the June options the open interest builds from 210 to a peak at 190 then has a long tail to 165 on the put side while on the call side it is focused at 210. In September, the first chain covering the next earnings report, open interest is biggest at 200 on the put side and is spread from 200 to 220 on the call side.

Honeywell, Ticker: $HON

Trade Idea 1: Buy the stock on a move over 200 with a stop at 196.

Trade Idea 2: Buy the stock on a move over 200 and add a June 195/185 Put Spread ($2.30) while selling the June 210 Call ($1.40).

Trade Idea 3: Buy the June/September 210 Call Calendar ($4.90) and sell the June 190 Put ($2.25).

Trade Idea 4: Buy the September 185/200/210 Call Spread Risk Reversal (50 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 with the month of April in the books, saw equity markets showed resilience with a rebound from an ugly start to the week to finish stronger.

Elsewhere look for Gold to consolidate in its uptrend while Crude Oil consolidates in a broad range. The US Dollar Index continues to drift to the downside while US Treasuries consolidate in their downtrend. The Shanghai Composite looks to continue in consolidation along with Emerging Markets.

The Volatility Index looks to remain very low and stable making the path easier for equity markets to the upside. Their charts are mixed with the SPY following the QQQ higher but with both looking strong on both timeframes. The IWM however remains stuck in consolidation under resistance. 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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