Honeywell Stock Faces Off Key Trendline After Earnings

HON's 80-day moving average is coming into play today

Digital Content Manager
Oct 30, 2020 at 10:10 AM
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The shares of Honeywell International Inc. (NYSE:HON) are down 1.3% at $162.41 at last check, despite the consumer goods conglomerate's better-than-expected third-quarter earnings. The drop came after the company also reported a 53% slump in year-over-year profit, which was of course attributed to a pandemic-driven plunge in air travel that hit sales in the aerospace unit.

Digging deeper, Honeywell stock started chopping up the charts only a week after shares hit a March 18, four-year low of $101.10. And while the 80-day moving average has been a constant source of support over the past several months, the equity is now testing that trendline, and remains way off its January high near the $183 level. Year-to-date, HON is down 8.2%.

Analysts are split toward the security, with seven of the 13 in coverage carrying a tepid "hold" rating, and the remaining six sporting a "strong buy." Meanwhile, the stock's 12-month consensus target price of $175.26 is a healthy 6.5% premium to current levels. 

The options pits are singing to a different tune, with a clear preference for calls. This is per HON's 50-day call/put volume ratio of 1.99 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits in the 91st percentile of its annual range. This suggests a healthier-than-usual appetite for bullish bets of late.

 

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