Industrials Just Bounced — And There’s More to Come
The industrials sector is showing signs of resilience despite the challenging macroeconomic environment. After moving higher from a key support area, the trend suggests that investors are still optimistic about the real economy. If this momentum keeps building, the recent pullback could be short-lived and pave the way for a more sustained recovery.
Industrials are not the most beat-down sector presently; that still goes to technology. But the chart presents to me something like an opportunity, as it looks like we’ve now got confirmation that the bottom is behind us. A bounce off institutional support for industrials, especially given their current macro outlook, is a forceful bullish signal that the market hasn’t given up on the real economy despite current oil prices still being elevated. While I’ve been watching tech stocks for the bounce, industrials look set to test a new level soon and could confirm a larger breakout despite current macro headwinds.