Honeywell's stock price may be on the verge of a breakout
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Commodities - Technical Analysis
Signs of a turnaround have emerged for gold and silver, and a strong upward move could trigger the next upward wave. A breakout above the key downtrend lines could also be on the horizon, which would further reinforce the positive turnaround. The price of oil has broken below the 100-day moving average, weakening the bullish outlook, and with the uptrend broken, it has entered a correction phase. Natural gas is showing a correction following a sharp decline, but has not yet managed to break through its downtrend line. Copper continues to trade within a wide range and is approaching the lower end of that range. Following a significant decline, wheat and corn prices have reached key support levels from which an upward correction—or even a new uptrend—is likely to begin.
FX - Technical Analysis
The dollar's momentum has eased, but confirming a trend reversal would require a decisive bearish session against the euro. Against the British pound, however, the exchange rate remains in an uptrend. EUR/HUF continues to trade within a narrowing range, while the dollar remains in an uptrend against the forint. USD/JPY has broken out to the upside from its consolidation pattern, suggesting further upside potential. EUR/CHF previously broke below a key support level that had defined its uptrend, and the pair is now characterized by a downtrend.
Major indices began to fall at the end of last week, but the movements were news-driven, and there has been significant volatility, which has resulted in a low number of opportunities indicating a quality breakout for the past two weeks. This week, one of the stocks from our Equity Top Pick List, Honeywell, also ranked high on the momentum list. After a minor pullback, the technical picture could indeed be supportive.
Best rated US stocks based on momentum ranking
Compelling technical picture:
Honeywell (daily): The chart indicates a potential long opportunity, but it is only worth opening a position if specific technical conditions are met. Honeywell, which is on our Equity Top Pick List, has been trading within a consolidation channel for some time and is currently attempting to break out of it to the upside. The $250 level represents an important technical resistance. The most recent upward wave showed the greatest relative strength: the stock has just experienced a day of heavy buying volume with several sharp rallies, indicating favorable long-term buying interest. Based on this, an attractive long entry opportunity may emerge following a retest. It is worth looking for a buying opportunity primarily after the price retests the level around $234. If the price successfully breaks through the $250 resistance level, a target price of around $281 appears at least achievable from a technical perspective.
List of stocks with a chance of a turnaround in the coming weeks
Most popular US stocks
The momentum model supports the creation of a technical based stock list that helps to find shorter-term trading opportunities. The model can be used to identify stocks that show reversal signals following more sustained falls/underperformance. We examine one-year, six-month, three-month, one-month and five-day momentum values, which are used to rank the stocks under consideration. The higher a stock is ranked in the order, the better it technically performs relative to the others. The change in the ranking over time is used to determine the life cycle of the stock.
- In the first table, we collect the stocks that show the most attractive picture compared to the others in a given week based on momentum factors, of which those are also presented in a separate chart where a favourable situation can be identified based on additional technical analysis tools.
- In the second table, we list the stocks that are already worthy of being placed in watchlist status. They are not among the best performers, but they have the potential to improve and signal a turnaround in a few days or weeks.
- In the third table, we have also collected the more popular stocks to help identify their position in the momentum order.
The report shows the results of a technical - quantitative based stock screening, which does not examine the fundamental background/value of the companies. For this reason, risk management/position sizing rules should be designed accordingly.
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