HON, Honeywell update

hon apr 28 2013

We were wrong on Honeywell (see previous blogs) thinking that it would not rise much above $60 or so, and here we are at  about $74. This time we are using the longest chart that we could find (Globe & Mail) to improve our chances of getting it right. The only thing that stands out fairly clearly in this chart is a wave 3 from 1991 to 1999, corresponding with the tech rise at that time. Everything else is educated guesswork. Even so 3 distinct possibilities present themselves. In black; the peak in 1999 is THE peak, so wave 3 is somehow not wave 3 and from that point on the stock traces out a “flat” with an unusually long B wave with a new, unorthodox, top. Wave down should start any moment. Given that the pattern has ben in force almost 14 years already, any moment means sometime in the next three months or so.  In purple;  wave 3 is indeed wave 3 and following that there is a triangle wave 4. Given the $40+ “mouth” of this triangle a top at around $85 should be anticipated, after which the stock should drop back to the lowest point in the triangle ($20).       In blue; no triangle, just an a – b – c  flat followed by a very ugly wave 5. All that is needed is just a new high, which we already have.

The upshot is that all three are calling for a fairly dramatic drop, either now or pretty soon. Time to sell. See detail of B-wave (or 5th wave) below;

hon apr 28 s 2013