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 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.
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).