Honeywell (NYSE:HON) started higher in December and continued to a top at the end of April. Since then it has digested the move, consolidating in a falling channel. The price crossed below the 50 day SMA at the end of the month and bounced. It then returned to the top of the channel last week. It ended the week breaking above the channel Friday. It is within $2 of the all-time high entering the week with the RSI rising in the bullish zone with the MACD crossed up and rising.
At the top of the Bollinger Bands®, they are flat, and would usually need to open to allow a further move higher. There is no resistance above 174. Support lower sits at 171 then 1768 and 164. Short interest is low under 1%. The stock pays a dividend with a yield of 1.90% and went ex-dividend May 23rd. The company is expected to report earnings next July 18th.
The June options chain shows the largest open interest on the call side at the 175 strike. There is size at 165 and 170 as well. The July options, covering the earnings report, are biggest at the 155 put and then the 170 and 175 call strikes. But all 3 are relatively light. The September options are biggest at the 175 call, but big from 165 to 180 on the put side it is biggest at 150 and 165 but spread from 135 to 170.
Honeywell, Ticker: $HON
4 Trade Ideas For Honeywell
- Buy the stock on a move over 174 with a stop at 171.
- Buy the stock on a move over 174 and add a July 170/160 Put Spread ($2.25) and sell the September 185 Calls ($1.60 credit).
- Buy the June/July 175 Call Diagonal ($2.25) and sell the June 165 Put (50 cent credit).
- Buy the July 165/175/180 Call Spread Risk Reversal (20 cents).
Elsewhere look for Gold to continue higher while Crude Oil continues to move lower. The US Dollar Index looks to continue lower in the updrift while US Treasuries consolidate their move higher. The Shanghai Composite has renewed the downtrend while the bounce in Emerging Markets continues to move them higher.
Volatility looks to continue to ease making it easier for equity index ETF’s SPY, IWM and QQQ, to move up. Their charts all show a strong move higher on the week and firm reversals on the weekly chart. The daily charts show the SPY and QQQ with strong moves up all week, while the IWM stalled midweek and consolidated. Use this information as you prepare for the coming week and trad’em well.
Disclaimer: 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.