Sector Drilldown:
Industrials
Last week in the markets was strong and saw solid performance from the previously reviewed sectors, but the streak of profiled sectors leading the markets for the week ended as Information Technology couldn’t take the top spot. Broad market breadth also continues to progress through the measures we follow as we build into the year end. Lots of technical improvements under the surface in recently.
This week we are diving into Industrials, last weeks reject. While the sector did move this week with the markets, it doesn’t look like the delay was a big issue. That said, it did eek out a slightly better performance than Tech, so maybe I did get the backwards John Doss. Either way, we are here now so lets jump in.
Chart Highlights
In the EW Sector RS Rankings we can see that Industrials still sit in the middle of the pack, but worth noting that it came in second to Financials in performance for the week. Industrials look like they have been pretty stable here in the middle over the last quarter.
The EW Industrials sector chart below shows how stable its RS really has been, Relative strength gave up the most ground early in the summer, bounced, and has since flatlined as its price snuck out to new closing highs. RSI is now trying to move over 60 into a fresh bull range which would be a good sign if it can extend away from there instead of getting rejected as it did most of the summer.
By sorting the EW Subsector RS Rankings you can see Industrials at the bottom of this snapshot with most of the sectors in orange with the exception of Industrial Goods and Transportation which are leading handily.
While pulling them out of the crowd to rank the Industrial Subsectors versus each other for an easier view, Industrial goods is the one that sticks out even though it is transports that get all the attention. Funny thing about that is our broad EW transportation index ran during the late summer as IYT struggled with UPS and FDX. At this points the transports look ready for a potential break while the goods step up.
Sector breadth is improving, but no real standouts other than the AD line being closer to this than the overall universe
Relative comparative charts also showing a good bit of digestion after last years strong run that ended in March.
This week I thought it was worth looking at the percent making new highs and lows charts as a comparative. The first chart is the reading for the entire sector as a baseline, again showing no big spikes yet, but a nice progression in new highs across all three with new lows deteriorating quickly. Once we have our baseline looking down to the subsector level can give a great view of which ones are most active at the moment. Now this reading will have some skew depending on how many constituents are in the subsector, but even factoring that in using percentages gives a cleaner view when comparing over all our segments. Within the view below we can see a clear difference between the Industrial goods and Machinery spaces. On the longer reading Transports showing the highest participation.
In the video we cover each of the subsectors 4 pillars of relative strength in depth and point out names within each that look worth keeping an eye on this week across many different trading styles. I tend to move fast through the names I cover, so I have added them below for easier reference.
As always, I hope this helps!
Reviewed Tickers
Industrials ETFs
EXI, PAVE, AIRR, XLI, JHMI, IYJ, RGI, FIDU, FXR, VIS, XTN, FITE, FIW, PSCI, GRID, ITA, SIMS, UFO, PHO, BDRY, PKB, XAR, PIO
Aerospace & Defense
RTX, TXT, CAE, HII, HEI, CW, TDG, AXON, HXL, ERJ, BWXT, AIR, PSN,
ARNC
Commercial & Professional Services
EXF, HCCI, ICFI, WCN, TBI, INFO, FC, VRSK, TRI, CPRT, RDVT, FCN, KFRC, RELX, UPWK, MARA, VSEC, TW, TRU, SCI, RBA, TILE, ASGN, EXPO, HSII, BV, HNI, MSA, MLHR
MAN
Construction Materials
AMRC, MYRG, PWR, BBCP, ACM, CSWI, JCI, ROAD, SSD, AAON, JELD, UFPI, AWI, DOOR, AZEK, EME, MAS, DY, APOG, ACA, LII, FBHS, PGTI, TREX
OC
Industrial Goods
RUSHA, AER, ROP, URI, FAST, TGH, WSO, TRTN, AL, UNVR, DXPE, BECN, GATX, FTAI, IEP, GWW, TITN, MRC
Machinery
TRS, FSS, IEX, IR, LECO, FELE, TRN, CNHI, NPO, DOV, TNC, WAB, MWA, LXFR, KMT, GBX, KRNT, PNR, BOOM, OTIS, CMI, WNC, MTOR, ITW, PH, CAT, TTC, GG, OSK, DE
LNN, B
Transportation
LSTR, NSC, R, CSX, KSU, CHRW, AAWW, ARCB, WERN, DSKE, XPO, ASR, NMM, ZTO, CMRE, RLGT, UAL, NM, EXPD, UPS, CP, FWRD, ULH, MRTN, USAK
ATSG, SAVE, JBLU, ALGT, LUV, SKYW, AAL, ALK
