Absorbing Blows:

The industrial space continues to hold its own in 2019 as we enter the fifth month of the year. Give it credit as it has had to endure a couple drubbings. Two of the top five components in the XLI, BA and MMM, have bruised the ETF but it is making a stand. BA is now on a 5 session losing streak, and for those that have correctly stated that it will not go down on bad news, as time goes on it is not rising either. MMM that slumped lower by 12.4% last week is following through again this week off well more than 3% heading into Friday. The ratio chart comparing the XLI to the S&P 500 shows it is still in a nice uptrend.

Soft Landing?

Or turbulence into the runway? Boeing, being the largest component in the XLI will obviously have some say in the direction of the group. After meeting resistance at the round 400 number on 4/5, its 50 day SMA has begun to slope downward putting a damper on the short term trend. Time as we mentioned above is becoming a factor, as it is true that the bears have been unable to push the stock lower. But at the same time the bulls have made little effort to demonstrate some price appreciation. This is likely to resolve in a frenzied fashion as the Bollinger Bands tighten to the tautest they have been since last November. 


There always seems to be chatter about infrastructure. Talk is cheap though, and PRICE action always matters more. Below is the chart of a heavy construction play KBR, and how it appeared in our 4/3 Industrial Report. It is having a banner year higher by 48% thus far and has risen 14 of the last 16 sessions. Depending on tomorrows CLOSE it is looking like a 6 week winning streak is going to occur. During the timeframe it has gained 28.9% from top to bottom, while the XLI has added 8.3%. A break intraday above a bull flag reversed Wednesday, and the 23 area was resistance last October and November. A decisive break above could be powerful.

This article requires a Chartsmarter membership. Please click here to join.