As 2024 concludes, a year marked by a significant rally in high technologyâparticularly in the electronics and semiconductor sectorsâthe focus on Wall Street has quickly evolved toward quantum computing. This sub-sector, which has been monitored for some time, is now gaining considerable attention, especially as micro-companies like Quantum Computing (QUBT), Arqit Quantum (ARQQ), D-Wave Quantum, and Rigetti Computing (RGTI) have surged during the low-volume holiday trading sessions. If quantum computing is indeed set to be a major theme in 2025, one need look no further than Honeywell International Inc. (HON) for exposure to the sub-sector. Formed in 2021, Honeywell's Quantinuum division is the result of combining Honeywellâs quantum hardware team (from Honeywell Quantum Solutions) with the quantum software team at Cambridge Quantum Computing. Quantinuum positions itself as the worldâs largest integrated quantum computing company and is currently the subject of speculation surrounding a potential IPO. Notably, Honeywell owns 54% of Quantinuum, and there is increasing speculation about a potential breakup of the Honeywell conglomerate, which could unlock value, particularly in its aerospace division, similar to the recent restructuring at General Electric (GE). Given the speculative nature of these developments, it is valuable to examine SIA relative strength to ascertain a baseline of technical data. The first chart above, the SIA Matrix Position, illustrates where shares of Honeywell (HON) rank within the SIA S&P 100 Index. This chart indicates that Honeywell remains a relative underperformer, as it occupies the Unfavored zone of the report in position #62. While it has risen in the rankings and is currently at its highest position in a year, it remains outside the SIA Favored zone, as preferred by SIAâs rules-based methodology. The second chart, a monthly candlestick chart, provides a long-term view of Honeywellâs price movement. Since 2021, shares have consistently encountered resistance around the $215 level, where sellers have historically overwhelmed buyers. However, in the last quarter, shares broke through this resistance and advanced to the $230 level.
To further analyze this price action, the Point and Figure (P&F) chart, scaled at 2% and extending back to 2011, has been used to capture long-term resistance levels. Additionally, the SIA Matrix Position overlay tool has been applied to show where Honeywell was ranked within the SIA S&P 100 Index over time, marked in red, yellow, and green. Consistent with the first table, shares are still positioned in the Unfavored zone. Notably, the P&F chart reveals the formation of a catapult, marked by a quadruple top followed by a double top. The catapult is regarded as a strong signal because it represents a decisive market move after a period of consolidation, often indicating the potential confirmation of a new trend. Support is now sitting at the first green line of $216.43 and further observed at $196.03, with a notable minor uptrend (black) line converging around the psychological level of $200. Resistance can be extrapolated with a vertical P&F count at $253.58 and $263.83. The final piece of intelligence available from the SIA platform is the SIA SMAX score, which assesses Honeywell across five asset classes with two intensity levels, for a total of 10 readings. The current SIA SMAX score for Honeywell is 9 out of a possible 10, signaling a positive near-term technical outlook, though conflicting with its still negative ranking in the SIA Reports (main coach), which tends to be a longer-term indicator for SIA practitioners. In summary, while Honeywell has shown some technical improvement in the short term, including interesting Point and Figure signals, the companyâs relative strength remains below that of other stocks. As such, SIA favored zone alerts will be set on the platform for Honeywell for potential consideration, should the technical indicators continue to improve.
Disclaimer: SIACharts Inc. specifically represents that it does not give investment advice or advocate the purchase or sale of any security or investment whatsoever. This information has been prepared without regard to any particular investors investment objectives, financial situation, and needs. None of the information contained in this document constitutes an offer to sell or the solicitation of an offer to buy any security or other investment or an offer to provide investment services of any kind. As such, advisors and their clients should not act on any recommendation (express or implied) or information in this report without obtaining specific advice in relation to their accounts and should not rely on information herein as the primary basis for their investment decisions. Information contained herein is based on data obtained from recognized statistical services, issuer reports or communications, or other sources, believed to be reliable. SIACharts Inc. nor its third party content providers make any representations or warranties or take any responsibility as to the accuracy or completeness of any recommendation or information contained herein and shall not be liable for any errors, inaccuracies or delays in content, or for any actions taken in reliance thereon. Any statements nonfactual in nature constitute only current opinions, which are subject to change without notice.
