The Big 3: HON, BAC, RTX

**Marlee** (0:00)
It's time for The Big Three. We've got three stocks, three charts, and three trades for you. Rick Ducat taking us through the charts as always. Here to take us through the trades, Dan Deming, Managing Partner at KKM Financial. Dan, great to have you back on the show here. We're holding on to this mixed picture, the Dow a little lower today though. We did hit records yesterday though. How are you looking at the market action we've seen so far this week?

**Dan Deming** (0:21)
Well, you know, it's interesting, Marlee, as you pointed out, I think that, you know, you're seeing this dispersion continue to unfold in the market and the reaction to earnings is breathtaking, to say the least. But overall, the overriding theme is that the sectors in the market that continue to kind of see that rotation, maintaining this upward momentum, that's why I'm highlighting some of these names today, continue to build a foundation and support this wall of worry, I guess, for lack of a better term, that we'd like to say in the industry as this market continues to move higher, even though we're seeing yields pushing up today, the market is really not giving up much ground, and overall, I think the reaction is that earnings are blowing away the expectations and that's providing the momentum.

**Marlee** (1:07)
All right, so then let's dive into Big Three here. You've got Honeywell as your first pick. They are down a little bit today, turning down about 2%, but we're up on the month, so how are you looking at them?

**Dan Deming** (1:19)
Well, you know, the big spin-off a couple of months ago, and I think HONA owners are not so happy right now, but I think the main company here, Honeywell International, HON, will continue to maintain this upward momentum as we move into the second half of the year. You think the areas that are in industrial automation, energy sustainability, things of that nature, and just the general momentum in the stock. Certainly today we're seeing a little bit of reversal, but overall I do think that you're going to continue to see this stock perform well going into the second half of the year and maintain this upward price action.

**Marlee** (1:53)
All right, so Rick, as we look at Honeywell, are you seeing a potential here in the technicals that we could maintain some of this upward price action that we're seeing?

**Rick Ducat** (2:01)
We remain close to those highs that we saw near 252 Honeywell, one of those companies, I think you'd be hard pressed to go around a big building and not find something made by Honeywell, so an interesting company to follow to be sure here, but 252 was our high point. We had kind of a double top formation right there. We also had previous highs here at our second red line, near about 248 We still haven't quite managed to make a strong close above that level, save for one day, which was a red candle, which very quickly dissipated as well. So we remain below that high water mark. You can see, though, that our trend has accelerated. We now have our shorter, steeper trend line here in white versus our more shallow trend line in blue, giving us a sign that we have started to improve in terms of our price momentum. However, today's price activity is taking us below that trend line potentially. The day is still quite young. We could see that turnaround here, something to note. We can also see here, our relative lows come in near 237, our green line there. That remains an area to watch for a potential breakdown. So, when we think about our moving averages, in this case, our dark blue five-day EMA comes in near about 245 We have broken below that level here. So, again, a very early potential sign of trend change here. The shorter term, the moving average, the faster it will react, but the less significant it is. The next one to keep an eye on would be our teal 21-day EMA representing one month near about 238.44 at this point. RSI exhibiting a triangular shape here, compressing in an increasingly narrowing range here. So, look for a breakout beyond either of those boundaries for a further directional clue.
Finally, our volume profile study shows that we have a node up here, a concentration of trading activity between about 240 to 245 Things start to pick up again here around 234 So, if we break below that level, look for possible consolidation or solidification around that level.

**Marlee** (3:57)
All right, right now we're at 242.82 with that 2% move to the downside. Dan, so how would you look to trade this name?