4 Trade Ideas for Honeywell: Bonus Idea

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

Honeywell, $HON, marched steadily higher until it had retraced the full drop during the pandemic. Then it gapped higher in November and continued on to a 138.2% extension of the retracement in December where it met resistance and pulled back. Another push higher into March met resistance just under the 161.8% extension and it has been consolidating there since April. It ended last week at resistance with the Bollinger Bands® flat.

The RSI is rising in the bullish zone with the MACD crossing up at the zero line. There is no resistance above 232.60. Support lower comes at 226.50 and 220 then 216 and 213 before 208. Short interest is low under 1%. The stock pays a dividend with an annual yield of 1.61% and has been trading ex-dividend since May 13th. The company is expected to report earnings next on July 22nd.

The June options chain shows the biggest open interest at the 220 and then 210 strikes on the put side. On the call side the biggest areas are the 230 and 240 strikes. The July chain is far less active and has open interest at the 220 put as well as from 230 to 250 on the call side. The September chain is the first to cover the earnings report and it sees a focus in open interest from 220 to 200 on the put side, and much bigger from 220 to 240 on the call side.

Honeywell, Ticker: $HON

Trade Idea 1: Buy the stock on a move over 233 with a stop at 227.

Trade Idea 2: Buy the stock on a move over 233 and add a July 230/220 Put Spread ($4.20) while selling the September 250 Call ($3.65).

Trade Idea 3: Buy the June/September 240 Call Calendar ($5.95) and sell the July 220 Puts ($2.15).

Trade Idea 4: Buy the September 210/240/260 Call Spread Risk Reversal (75 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 May now in the books, saw equity markets continue to show resilience, holding in consolidation near all-time highs.

Elsewhere look for Gold to continue its move higher while Crude Oil possibly resumes its uptrend. The US Dollar Index looks to continues to move lower while US Treasuries consolidate in their downtrend. The Shanghai Composite looks to continue the short term trend higher while Emerging Markets consolidate in their uptrend.

The Volatility Index looks to remain very low making the path easier for equity markets to the upside. Their charts are holding strong, especially on the longer timeframe. On the shorter timeframe the QQQ may be at risk as it consolidates at a lower high after a rebound. The SPY is a whisker away from new highs though as the IWM continues to mark time sideways. 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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