Stock of the day: Honeywell

Yesterday, American stocks surged. Hard to say what the real reason was but of course you can easily find experts who will be glad to explain the historical movements. Today, similar movements can be seen in Europe, despite heavy fighting still going on in Ukraine, where Russia continues their barbaric invasion.

In today’s stock of the day, we have Honeywell, which we previously analyzed at the beginning of the year. Back then, one share was 211 USD and we were bearish:

“So far, it looks like sellers are winning this one too. The price is testing the neckline in a bearish manner, so we have a rise and then a quick drop, which leaves a long upper shadow on the daily candle. That usually means a rejection and at the same time – a confirmation of the sell signal.”

You can see it was a great call as almost immediately the price fell down recording 5 bearish weeks in a row. Yesterday’s rise helps to create the hammer candle on the weekly chart. This hammer is not being built in a random place but on a very important support, which is the 38,2% Fibonacci and also the top from the end of 2019 (orange).

If the price will close a week above the orange area, that will be a great buy signal for the forthcoming weeks. In case the price will drop and the hammer will not be created, we will have a signal to sell. Today’s session is crucial.