Soft Landing?
The industrial group continues to hold its own as it is the third best major S&P sector performer YTD, as the XLI has advanced more than 17% so far in 2019 (interesting is that the XLRE via real estate group has taken over the pole position from technology up 21.1%). Below is the chart of BA, the largest component in the XLI, and although it has been a laggard with the crashes of a couple of its airlines, it may be setting up on the bullish side. As always we need PRICE confirmation, but a falling wedge pattern has taken shape, and Wednesday registered a hammer candle that tested a bullish morning star pattern. It has spent a month below its 200 day SMA, but a move above could really get this name moving, and remember this is by far the highest priced stock in the Dow.
Bellwether Blues:
Federal Express has been a name that used to carry heavy weight when it spoke after earnings reports. It is hard to believe this name is down 41% from most recent 52 week highs, and the markets have basically shrugged it off. The last 4 weeks have been down by nearly a combined 20%, and all four CLOSED hard upon their lows. UPS has been acting better down 22% from its recent peak and is up more than 5% this week heading into Friday. FDX does have a compelling chart here as it trades into a bullish morning star pattern completed Tuesday, which happened to be a double bottom near the round 150 number. It is still in no mans land, but one could not fault longs who are looking to take a decent risk/reward shot to the long side.
Examples:
The railroads have been holding up relatively well versus the airline and trucking groups within the industrial sector, until today (UNP and NSC both fell more than 2%). One name that is hanging in there is GWR, and below is the chart and how it appeared in our 5/31 Industrial Report. It looks good on both daily and weekly time frames, where on the daily it broke above a bull flag pivot of 96, and here we have the WEEKLY chart that is acting well POST breakout from a 93.01 cup base pivot. We know the best breakouts work right away, and this one feels like it is being pulled magnetically to the very round par figure.