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Ignoring Industrials
If you live in the United States, it’s almost a certainty you are overexposed to U.S. large-cap tech.
It dominates the S&P 500, which dominates nearly every passive 401(k) plan and index fund like $VOO ( ▼ 0.13% ) .
That’s been a blessing over the past couple of decades, but it also means you're underexposed to everything else.
$XLI ( ▲ 0.08% ) - Industrials is one of those sectors.
It makes up less than 9% of the $SPY ( ▼ 0.13% ) S&P 500 but has been performing well over the past several months.
We talked about recession last week and this area of the market holding up and rebounding as well as it has keeps me optimistic of the lows possibly being in.
With that optimism comes a bit of reality, most investors ignore the industrials.
The hottest names people talk about are usually sleek tech plays doing futuristic things.
But if you ever walk through one of these industrial company plants, you realize quickly: they’re using just as much cutting-edge tech.
They’re just applying it differently, to build, move, heat, cool, and assemble the stuff the world actually runs on.
AI may help these companies, but it’s not replacing roads, HVAC systems, or jet engines anytime soon.
The goal of this post is simple: highlight a handful of strong names within industrials that the market seems to be catching on to.
These companies may not dominate the headlines, but the charts show clear strength and in a world reshaped by AI, they’ll be using it to build smarter, faster, and more efficiently.
$UBER ( ▲ 0.62% ) - Uber operates a global ride-hailing and food delivery platform.
Great looking base that it would be silly not to own if it breaks back above $80.
$CARR ( ▲ 1.33% ) – Carrier Global Corp. provides HVAC, refrigeration, and fire/security solutions for residential and commercial markets.
Strong trend breakout and successful retest of prior cycle highs.
$GE ( ▲ 0.22% ) - GE AeroSpace designs and services jet engines and integrated systems for commercial and military aircraft.
Strong relative leader making new all time highs.
$JCI ( ▲ 0.75% ) - Johnson Controls makes smart building systems, including HVAC, security, and energy solutions.
Broke out of a multi-year base and made new all time highs this week.
$PAYX ( ▲ 0.21% ) - Paychex Inc. provides payroll, HR, and benefits outsourcing solutions primarily for small- to medium-sized businesses.
Holding support above breakout zone with constructive RSI and base breakout structure.
$DE ( ▲ 0.53% ) - Deere manufactures agricultural, forestry, and construction equipment worldwide.
Cleared multi-top resistance with RSI holding above 50 and steady relative improvement.
Bonus International ETF - $EXI ( ▲ 0.2% ) - offers diversified exposure to global industrial stocks, including heavyweights in aerospace, defense, machinery, transportation, and infrastructure.
Unlike $XLI ( ▲ 0.08% ) , which is U.S.-focused, EXI includes international names, giving it broader geographic diversification.
Top holdings include names like $GE ( ▲ 0.22% ) $UBER ( ▲ 0.62% ) $RTX ( 0.0% ) $CAT ( ▲ 0.42% ) $BA ( ▲ 1.64% ) $HON ( ▼ 0.7% )
Awareness is Step 1
If you're looking for places that may have leadership potential outside of the usual suspects, this corner of the market has plenty of candidates.
Industrials may not trend on social media, but the charts say plenty.
Know what you own. And more importantly, know what you don’t.
Weekly Show on Stocktwits
Check out my weekly show with my friends at Stocktwits!
In the first 20 minutes, I break down market conditions around $SPY ( ▼ 0.13% ) and the 200 day.
I think the context around the 200 day is important and often overlooked.
Put it on 1.5x speed and let it rip.
Cheers,
Larry Thompson, CMT CPA