HON breaks back below 20-day moving average
Honeywell International Inc. (HON) Technical Analysis Report for Jul 15, 2019 | by Techniquant Editorial Team
HON finished Monday at 175.01 tanking $2.13 (-1.2%), strongly underperforming the S&P 500 (0.02%). This is the biggest single-day loss in over a month. The bears were in full control today, moving the market lower throughout the whole session. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (HON as at Jul 15, 2019):
Monday's trading range has been $2.83 (1.6%), that's far above the last trading month's daily average range of $1.97. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently significantly lower than usual for HON.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bearish Outside Bar. Additionally, three candlestick patterns are matching today's price action, the Bearish Belt-hold, the Black Candle and the Dark Cloud Cover which are known as bearish patterns. The last time a Bearish Belt-hold showed up on October 9, 2018, HON lost -2.69% on the following trading day.
Prices are trading close to the key technical support level at 173.64 (S1). The share closed back below the 20-day moving average at 175.27. After having been unable to move lower than 174.75 in the previous session, the market found buyers again around the same price level today at 174.53.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Selling might speed up should prices move below the nearby swing low at 173.24 where further sell stops could get activated. With prices trading close to this year's high at 178.47, upside momentum might accelerate should Honeywell International be able to break out to new highs for the year.
Among the 13 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Belt-hold" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Honeywell International. Out of 12 times, HON closed higher 83.33% 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 66.67% with an average market move of 1.31%.