February 6 Chart of the Day - Honeywell
Precision oriented price action technical analysis by far provides the best edges and most setups for traders and investors across the markets so that's what we use for the basis of our reviews
Honeywell International (HON) reported earnings yesterday and announced that it was splitting the company into three separate business.
Reaction to the news was less than enthusiastic as share price was trading down over 5% earlier today.
Coming off all time highs (ATHs) last quarter price is now down nearly 15% since then so we wanted to review their chart from a price action technical analysis perspective.
We have featured over 400+ Charts of the Day since May 2023 and teach Price Action Trading for FREE to traders who join our Highly Rated Trade Room.
Monthly Chart
On the monthly chart we can see that price recently reached un-chartered territory after creating new $242.77 all time highs (ATH) this past November.
With little to no previous price history at ATHs price can go through what we like to call a "discovery phase" to create new structure.
In this scenario, price sped through the discovery phase (for now) and quickly faded back down towards previous and familiar price structure quickly falling through and below previous ATHs. Some would call this a failed break out.
All very normal.
As traders we're limited to estimating potential upside targets using only price action tools Trend and Fibonacci as shared for free in our Trading All Time Highs webinar replay.
Weekly Chart
On the weekly chart we can see where price set its ATH before quickly dropping back down the past few months.
Why then when a company makes ATHs can price quickly drop back down?
For a variety of reasons including maybe this was a case of traders and investors taking some profits off the table.
Regardless, it's clear to see that for more than two decades price has been making a series of higher highs and higher lows /aka/ an uptrend.
And surely you know the old saying: the trend is your friend!
Until it isn't.
It goes without saying though, the only guarantee in the markets is that price cycles. It cycles up and it cycles down across all time frames and all charts and rarely, if ever, moves in a straight line.
Only time will tell for sure what price will do next...
We've layered in traditional Fibonacci levels as well as support/resistance and trend to help identify potential price levels of interest and/or future price targets.
Armed with precision oriented charts like these both traders and investors can formulate their respective plans.
So what's next?
We don't make predictions...
Nobody knows for sure but using these 5 price action tools traders and investors can develop levels of interest in both directions.
- Support/Resistance
- Trend
- Fibonacci
- Supply/Demand Zones
- Change Control Zones
ChartPros provides the exact methodology in its price action technical analysis courses to create charts like this with the most precise and accurate levels from which investors and traders can formulate their respective trade plans.
Take a look at the charts and let us know what you think. We'd like to hear from you in the comments sections.
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