Deer Running:

In our Industrial notes of the past, we often like to make comparisons to big noticeable names. On more than one occasion, we have put up UPS against FDX. The former had been the clear winner until it botched an earnings call on 7/27 falling 7% (they are both lower in the low teens from their 52-week highs). We have contrasted the likes of BA and ERJ, with the latter having the look of a good-looking double bottom pattern. Below we take a peek at how the divergent moves in CAT and DE. CAT is lower by 17% from highs made in early June, while DE is now 10% off its peak made on 5/10. DE is higher by 34% YTD, nearly tripling the 12% advance from CAT. Caterpillar is below both its 50 and 200 day SMAs and must hold the very round 200 number that held on 7/19. DE is obviously the better play as long as it remains above 350, and it made a higher high in June-July while CAT did just the opposite.

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