Honeywell (HON) has been on fire in the past year or so in terms of not only growing revenue at a decent pace, but also continuously improving its margin profile. I said going into the Q2 report that I was cautious, but the stock has continued its trek higher, currently trading for a new all-time high. My concerns surrounding the valuation and the lack of strong bullish momentum don’t appear to be shared by market participants, and HON is off to the races again.
First off, my concerns over bullish momentum appear to have been at least partially answered by the immediate reaction of the stock. The RSI is moving higher along with the stock price, and while the MACD is still at a subdued level, a bullish cross in the shorter term MA over the longer term one adds some credence to the idea a further rally is coming. In addition, the obvious bullish fact is that the stock is trading for a new high; that is never a bad thing. In short, then, it looks like market participants are picking up the bullish conviction once more, something I was on the fence about going into the report.