For his second Executive Decision segment of Monday's "Mad Money" program, Jim Cramer sat down with Darius Adamczyk, chairman and CEO of Honeywell International (HON) , the industrial technology and manufacturing company.
Adamczyk said it would be easy for Honeywell to dial up short-term projects by not investing in the future, but that's not right for the company. Honeywell is investing in breakthrough initiatives, some of which deliver profits today, some of which will pay off in three or five years down the road.
One of those more immediate initiatives is quantum computing, which can help solve problems that traditional computers simply can't. Honeywell has merged hardware and software to create a leading quantum platform that will generate millions in profits this year and even more in the future, he said.
Honeywell is a compelling investment, Adamczyk added. It has a great balance sheet, a $4 billion buyback program and accelerating growth and profits. Honeywell is a lot more than just an aerospace and industrial controls company, he said.
Let's check on the charts as the fundamental story only goes so far. In our Oct. 25 review of HON we wrote, "Traders who are long HON may want to liquidate those positions as the charts are not encouraging at this point in time." Let's review things again.
In this updated daily bar chart of HON, below, we can see that prices started to turn lower back in August. HON is trading below the declining 50-day moving average line as well as the negatively sloped 200-day line. The On-Balance-Volume (OBV) line shows weakness since September as traders of HON have been more aggressive sellers with heavier trading volume transacted on days when HON has closed lower. The Moving Average Convergence Divergence (MACD) oscillator has spent most of its time below the zero line since September.
In this weekly Japanese candlestick chart of HON, below, we see a bearish picture. Prices are in a downtrend and trade below the declining 40-week moving average line. One lower shadow in February is not enough of a sign that HON is starting to find a bottom. The weekly OBV line shows a decline from early 2021. The MACD oscillator is bearish.
In this daily Point and Figure chart of HON, below, we can see a downside price target of $168.
In this weekly Point and Figure chart of HON, below, the software suggests we might see a downside move to the $129 area.
Bottom line strategy: Unfortunately I am not finding the charts nor the indicators on HON bullish enough to warrant a buy recommendation. Avoid the long side of HON for now. We are likely to get a better buying opportunity in a few months.