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Honeywell International Inc. (HON)

HON stock forecast: buy or sell

Close on Oct 23rd, 2020
$175.54 -0.74%
3 months performance
17.30%
Published: October 23rd, 2020 - 5.02pm EDT

HON stock outlook

  • Honeywell closed today at $175.54 after just changing a -0.74%.
  • Yesterday broke out above its latest top at $173.82
  • The stock is configuring an uptrend pattern since last March, when it bottomed at $99.78. Up to date, shares marked a 75.93% gain since the beginning of this rally. Yesterday Honeywell broke out above $173.82 giving an entry point
  • On October 16 broke out above its latest top at $173.82
  • Honeywell International Inc. operates as a diversified technology and manufacturing company worldwide.

Important note:
The viewpoints given in this post are personal and not recommendations for you to buy or sell stocks. The author of this text does not have an understanding of the individual situations of the reader, his or her finances or what is in his or her best interest at any given time. All users should speak with their financial advisor before buying or selling any securities Viewpoints are provided for education motives only

HON stock charts

Should I buy Honeywell stock?

All successful traders recommend adhering to a trading strategy and not make decisions based on subjective opinions, rumors or feelings. Trading strategies are meant for helping you in the decision process of what stocks to pick and when is the best moment to buy them. At Stocks2.com, we like to use very simple but trusted and powerful trend following trading strategies. Simple things usually work the best

Is $HON stock a buy?

Currently, Honeywell stock matches 2 trading strategies:

Uptrend buy setup

Honeywell stock continues to trend higher since last March and marked an amazing 75.93% gain. Price marked a pull back in this uptrend at $156.85 in late September, and since then it bounced off a 11.92%. Price just broke out above the entry point at $173.82, but it's still eligible. If price goes beyond $182.51, you should not chase the price and wait for another opportunity. If you decide to enter this trade, the suggested stop loss is at $156.44

Buy setupBuy pointStop lossRisk
Uptrend buy setup$173.82$156.4410%

ATH buy setup

All-time Highs is always an excellent buy point for those who like to buy high and sell higher. The good point of buying at all-time highs is that shares price doesn't have upper resistances, and usually it scales quickly. However, you must always be aware of a possible bulls trap that may trigger your buy order and then falls sharply. That's why a stop loss is always important. Price is now at 2.95% of all-time highs and it can breakout at any time, so if you want to trade this setup it's recommended to setup your order at $180.71. Arm your stop-loss at $162.64

Buy setupBuy pointStop lossRisk
ATH buy setup$180.71$162.6410%

Should I sell Honeywell stock?

When you are a novel trader and you own stock shares with some profit, it's really hard to decide the correct moment to sell and get your benefits. Much like when we have to buy shares, determining when is the best time to sell is not a fickle decision, and we must follow our own trading style. We like very simple setups to guide us on when is the best moment to sell a stock. Be aware that these setups should not be used for shorting Honeywell stock

As a golden rule, you must never hold a trading operation that yields greater losses than those expected upon purchase. The timing to sell your stock should always be ruled by the stop-loss (automatic or manual)

Is it time to sell Honeywell stock?

Currently, Honeywell stock doesn't match any of our preferred sell setups, so if you hold Honeywell stock and your operation is in profit probably is not time to sell now

Analysts' recommendations to buy or sell Honeywell stock

Brokerage firms and financial institutions post stock ratings based on their views of the market and the fundamental and technical situation of the analyzed stock. Unfortunately, the accuracy of these predictions is not very high, and certainly not a direct buy or sell signal

In the last 30 days, 3 brokerage ratings were published for Honeywell

Honeywell ratings

Brokerage firmRating
Oct 7th, 2020
JPMorgan Chase & Co. Buy
Oct 13th, 2020
Deutsche Bank Aktiengesellschaft Neutral
Oct 13th, 2020
Morgan Stanley

Technical analysis

Honeywell stock started an uptrend last March, and gained a gorgeous 75.93%. During this uptrend, the price offered some buy points on the breakouts. Latest low was in late September, when price bounced at $156.85. Honeywell broke out above $173.82 (its last top) yesterday. That breakout was a good buying opportunity

SMAs overview

Moving averages are simple tools for investors to gauge momentum. A moving average is the average price of a stock over a set period of time. Moving averages are usually calculated on different periods depending on the trading timeframe 21, 50, 100 and 200 days are the most usual moving averages

HON SMAs chart

Supports and resistances

Traders use support and resistance levels to spot price points on a chart that tend to behave as glass ceiling, preventing the price of shares to move in certain direction. A support level is a level where the price tends to find support as it falls. This means that the price is more likely to "bounce off" this level rather than break through it. However, if the price breaks down this level, it is likely to continue declining until meeting another support level. On the other side, resistances are where the price may find resistance as it moves up. In the same manner, this means that the price is more likely to "rebound" at this level, and if it finally crosses this level, the price will rally easily until it hits the next resistance

The current resistance levels are:

  • R1: $178.89 (1.91% above)
  • R2: $178.90 (1.91% above)
  • R3: $180.71 (2.95% above)
  • The current supports are:

  • S1: $173.82 (-0.98% below)
  • S2: $173.48 (-1.17% below)
  • S3: $168.75 (-3.87% below)
  • Bollinger bands

    So-called Bollinger bands are a well-established technique developed by John Bollinger. Fundamentally, the Bollinger Bands are bands that flow around a moving averagediffering in distance from the bottom to the top depending on market volatility. They are usually drawn by an interval of two standard deviations, above and below, from a moving average line. Bollinger himself recommends the moving average period to be 20

    Since the price surpassed the upper band on October 12, the price dropped by 0.81%. The price is moving near to the upper Bollinger band, signaling some level of overbought in recent sessions. This is not a sell point, as price can move in these levels for many days and weeks

    HON RSI chart

    Relative strength index

    The Relative Strength Index is an oscillator-type indicator that gauges price changes to identify when the share or financial asset is overbought or oversold. Like other oscillation indicators, the RSI fluctuates between 0 and 100. J. Welles Wilder introduced the relative strength indicator in 1978 and since then it has been widely used by traders

    The RSI dropped below the overbought level of 70 in early September after just crossing to the overbough zone for 1 day (weak signal). The RSI value today was 60.21. Since then, Honeywell shares went up a 1.78%

    HON RSI chart

    Earnings and financials

    Honeywell International Inc. ($HON) published quarterly earnings of $1.26 per share in late July, slightly improving the analysts consensus estimate of $1.21 per share. This quarterly report means an earnings surprise of 4.13%.

    Same quarter last year, reported EPS was $2.10, so recently posted EPS is a drop of -40%.

    HON ($HON) will host the quarterly earnings call on Friday next week. Market expects earnings per share (EPS) of $1.48, compared to Q2 that was $1.26.

    HON revenues and profits chart