Heavy Weight Industrials Breaking Out.

By Bennett Tindle
November 13th, 2019

As the market pushes new highs, one chart we have our eyes on is the S&P Industrial SPDR, ticker symbol $XLI.
We can see an attempt has been made at breaking the previous consolidation range, and we’ve successfully
printed a new all time closing high. Two stocks we like that are top-10 XLI components (remember, sector SPDR
ETF’s are not equally weighted!) as shown below.

Caterpillar

Caterpillar has fallen victim to the trade war, as evident in recent quarterly reports. That said from a technical perspective, in conjunction with the sector breaking to new highs as a whole, the possibility of a sustained expansion exists. We are closely watching the break out from a prolonged period of consolidation, as is evident by the move above the consolidation channel. We’ll be looking to any pullback to trend support as a possible buying opportunity, provided we don’t see any unexpected trade tensions arise.

Honeywell

Another very closely watched name and chart is that of Honeywell. This stock has successfully completed a higher degree 4th wave correction, and we are in the midst of the wave 5 advance. Although the most sound entry from a risk to reward standpoint has passed, we’ll be looking to this chart to help support the continued move higher in the overall sector (Honeywell comes in at at a 5.39% weighting in the #2 position, just shy of Boeing).