Honeywell International Inc. operates as a diversified technology and manufacturing company worldwide. Its Aerospace segment provides turbine propulsion engines, auxiliary power units, environmental control and electric power systems, engine controls, flight safety, communications, navigation, radar and surveillance systems, and aircraft lighting products for aircraft manufacturers, airlines, business and general aviation, military, space, and airport operations, as well as offers management and technical, logistics, aircraft wheels and brakes, and repair and overhaul services.
Take a look at the 1-year chart of Honeywell (NYSE: HON) with the added notations:
HON has held a very important level of support at $90 (green) for most of the last 6 months. No matter what the market has done since February, HON always found support at that level when tested. Now, the stock has approached $90 again, and that might provide another bounce higher.
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The Tale of the Tape: HON has a key level of support at $90. A trader could enter a long position at $90 with a stop placed under the level. If the stock were to break below the support, like a lot of stocks are doing lately, a short position would be recommended instead.
Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.
No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!
Christian Tharp, CMT
Follow me on Twitter: @cmtstockcoach