Honeywell could reach new heights
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US bank shares fell
The third-quarter earnings season in the US has picked up pace following the release of the latest figures from US banks. Based on preliminary expectations, the third quarter is likely to have closed with strong earnings growth for S&P 500 companies, led by the energy and technology sectors. The major US banks have still achieved solid growth on an annual basis, indicating that their operations remain strong, but the pace has clearly slowed in many cases, which has tended to result in negative share price reactions.
Commodities - Technical Analysis
Gold and silver continued their downward trend, bouncing off key levels. Until their downward trends are broken, they will not be able to produce a significant rise. The fall in oil prices reversed from the $87.5 level and began a slight upward movement. Natural gas remained in an uptrend; a significant rise could even occur if it breaks out upwards. The price of copper has become stuck in a wider range, so the oversold and overbought zones may offer more favourable trading opportunities. The falling prices of wheat and corn have reached key support levels; a buying reaction from these levels could present favourable long opportunities with limited risk.
This week, we analyzed Honeywell, one of the stocks on our Favorite Stocks list, from a technical perspective, because the alignment is favorable in terms of buying opportunities, and it may reach new highs after a higher low. Additionally, the curve of the heavily falling Dow Inc. chemical company shows signs of a turnaround.
Best rated US stocks based on momentum ranking
Compelling technical picture:
Dow Inc. (daily): The long-term downward trend was broken in recent days, closing above $25. This could be a good sign, as it had been accumulating below $25 for nearly six months. In such cases, there may of course be stronger retests, but buyers have begun to take control, so the horizontal natural resistance levels of $31.25 and even $37.5 may be achievable. Closing below $25 would indicate weakness, and then it would be possible to follow the stock from the sidelines again.
Honeywell (daily): At the end of the year, we saw the price reverse from a prolonged correction phase, which was confirmed in recent days by a rise above $200. Based on this pattern, 225 or even a new high could be reached. The risk can be managed by breaking the thin green trend line. If the price closes below $200, the long trend would weaken initially, but that would not necessarily mean the end of buying opportunities.
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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