For once, an auto company is forecasting a very challenging year, and its not Ford, General Motors, or even Chrysler. Today's warning comes from the American division of Honda - yes, a Japanese company. Dan Bonawitz, vice president of corporate planning and logistics for American Honda , said in an interview at the Los Angeles Auto Show that the U.S. auto industry is in store for a very challenging year. Bonawitz is looking for industry sales to drop as low as 15.9 million cars and trucks in 2008. He also gave a nod to U.S. automakers, stating that Detroit is really beginning to understand what it needs to do to improve.
Shares of HMC didn't respond well to statements that the investing public is used to hearing out of Michigan, as the stock dropped more than 1.5% on the session. HMC is now trading below its 10-day and 20-day moving averages, and its long-term 10-month and 20-month trendlines are poised for a bearish cross.
Even more troubling, should this downtrend gain momentum, is the wealth of bullish sentiment levied against the shares. The stock's Schaeffer's put/call open interest ratio (SOIR) of 0.44 ranks below 62% of all those taken during the past year, indicating a bullish slant from options players. Meanwhile, short interest is nearly nonexistent and half of the 6 analysts covering HMC rate it a buy or better.