After a 2,261% rally, this midcap stock is seen testing key 10-year support

Honeywell Automation stock is seen testing its monthly super trend line for the first time since 2014. At present levels the stock has shed one-third of its valuation from its peak.

Honeywell Automation India, the midcap stock, witnessed a frenzied run on the stock exchanges after the stock broke above its super trend line on the monthly scale in March 2014. Post which, the stock from levels of Rs 2,536 zoomed to record a summit at Rs 59,874 in June 2024 - a massive 2261 per cent or 23.6-fold gain.  In the calendar year 2024, Honeywell Automation stock hit a high of Rs 59,874, and a low of Rs 36,200. At present levels, the midcap stock's market capitalisation stands around Rs 36,000 crore.  This is only the second time in the last ten years that the stock has come within striking distance of its monthly super trend line. Earlier during the Covid-19 related panic sell-off the stock tested this key level, and then bounced back sharply.  The monthly super trend line is a key indicator in determining the overall long-term trend of a stock. Stocks trade above the same, tend to trade favourably and vice versa. At present levels, Honeywell Automation stock is less than 5 per cent shy from this major support.    Will the monthly super trend line support? And, what if the support is violated? Here are the possibilities as per the technical charts:  Honeywell Automation  Current Price: Rs 40,300  Downside Risk: 16.4%  Support: Rs 38,363; Rs 34,800  Resistance: Rs 41,050; Rs 42,200; Rs 42,750  On the daily scale, Honeywell Automation stock is seen trading below the key moving averages, thus indicating a likely weak bias. Further, the stock is seen testing support around the lower-end of the Bollinger Bands on the daily scale, which stands at Rs 40,250. Break and sustained trade below the same can accentuate the fall in the share price. CLICK HERE FOR THE CHART  On the weekly scale, too, the bias seems fairly negative albeit oversold as the stock trades below the 200-WMA (Weekly Moving Average). The 200-WMA stands at Rs 41,050. Thereafter, a test of the monthly super trend line at Rs 38,363 seems imminent.  In case, the long-term support fails to hold, Honeywell Automation stock can extend the fall towards Rs 34,800 to Rs 33,700 levels, shows the chart.  On the other hand, the stock needs to claw its way back above Rs 42,750 levels to negate the bearish momentum at the counter. Interim resistance for the stock can be expected around the 200-WMA and the 100-WMA at Rs 42,200 levels.