Stocks This Week: Sell Short Honeywell And PayPal

Photographer: Michael Nagle/Bloomberg

The market is likely to retrace some losses this week. The selling is expected to resume in September. On the 28th, the 1.88-year cycle tops, adding to the usual September weakness. The selling is likely to be concentrated in the big tech leaders. Here are a pair of recommendations.

The Honeywell weekly cycle below has been accurate in eight of the last ten signals. It appears that the shares will fall into the end of August. Relative strength has hit its lowest level since 2013. September has been the weakest month to hold the stock, up 37% of the time for a loss of about 3%. Honeywell is likely to fall closer to $175.

Honeywell-Weekly Cycle

The price downtrend is likely to accelerate as this accurate cycle turns down.

Honeywell-Monthly Histogram

The weak seasonality is evident in the histogram below.

PayPal is one of the weaker stocks in the NASDAQ NDAQ 100 as September approaches. We see the monthly cycle below. All six sell cycles have been profitable in the last year. In the last eight years, the stock has fallen in six. This is not a big sample, but it does fit the tendency for technology weakness in that month. Relative strength peaked in early 2021. The shares will likely be priced in the $50-$55 range later in September.

PayPal Monthly Cycle

This cycle is likely to further depress the share price.

PayPal Daily Graph

Relative strength is likely to extend its drop.