HON pushes through 100-day moving average for the first time since July 20th
Honeywell International Inc. (HON) Technical Analysis Report for Oct 12, 2018 | by Techniquant Editorial Team
HON finished the week -4.8% lower at 156.20 after surging $2.58 (1.68%) today on high volume, slightly outperforming the S&P 500 (1.42%). This is the biggest single-day gain in over two months. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (HON as at Oct 12, 2018):
Friday's trading range has been $2.99 (1.93%), that's above the last trading month's daily average range of $2.16. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently notably higher than usual for HON.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar.
The stock managed to break above the 100-day moving average at 155.16 today for the first time since July 20th. When this moving average was taken out the last time on July 20th, HON gained 0.37% on the following trading day.
With another close below the lower Bollinger Band, prices are confirming their strong downward momentum in the short-term. A rally back into the Bollinger Band on the next trading day although might signal a potential change in momentum that could lead to a correction back up towards the center of the Bollinger Bands at 163.95.
While the market is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close below the lower Bollinger Band" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Honeywell Int'l. Out of 114 times, HON closed higher 57.02% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 72.81% with an average market move of 1.86%.