The industrials Tuesday recorded just their second 3 session losing streak in the last 3 1/2 months. That speaks to how well they have performed, even with the recent issues concerning BA and MMM, both of which still hover in bear market mode. Of course we can not leave out the real laggards in the room being the transports. The rails have held up well, but the services names in FDX and UPS have been off putting. The former is now 40% off most recent 52 week highs, and if one were to tell me the S&P 500 is just 1% off its all time highs with that name acting the way it has, I would not believe it. The airlines have not helped the industrials either, and below we take a look at the current IYT chart which is worrisome.
The industrial machinery group, like all others has its share of leaders and laggards. Ratio charts separate the men from the boys. Names that have flourished this year include CIR GD and WWD. IR has been another solid performer higher by 37% YTD and 39% over the last one year period. On the chart below one can easily spot the disparity between IR and ROK. In fact ROK is LOWER by 3% over the last one year period. The ramp higher was caused by a 5 of 6 week losing streak from ROK the weeks ending between 4/26-5/31, that lost more than 22% from top to bottom. IR has CLOSED the last 3 weeks very taut, all within just .67 of each other. A big breakout is very possible depending on Fridays CLOSE.
The saying goes the best offense is a good defense. It could apply to the group in the stock market as well as the XAR is higher by almost 30% YTD. The fund is higher 15 of the last 26 weeks, and 2 of the last 3 rose 4.9 and 3.2%. Below is a name benefitting from the love the space is receiving, AJRD and how it appeared in our 6/7 Industrial Report. It is higher 8 of the last 9 weeks, and again this week by .6%, after the prior week jumped 5.1%. The second time battling at the round 40 number has seen a decisive breakthrough. Expect this name to grind higher.