While there is scattered strength among many of the better-known
industrials, such as those that make up the top holdings of the
Industrial Select Sector SPDRS ETF
), a number of smaller industrial stocks, particularly in
manufacturing, have begun to pullback to levels where traders have
been more inclined to buy than sell. Should these stocks continue
lower here in the final days of February, there's a good chance
that many will trade low enough to finish in technically oversold
territory before the end of the week.
Additional selling could easily put a stock like
) in oversold territory, for example. Although trading nearer to
short-term highs than short-term lows, IR had closed lower for
three days in a row heading into Monday's session, and in trading
lower on Monday, earned a "consider buying"
9 out of 10 rating
early in the session. The stock also has a short-term, positive
edge of more than three-quarters of a percent.
Earning a one-point upgrade intraday on Monday were shares of
). The ratings upgrade, which boosted the stock from a neutral, 7
out of 10, to a "consider buying" 8 out of 10, comes as the stock
pulls back from new, 52-week highs to finish lower for a second day
in a row. Shares of Cummins have been trading in bull market
territory since mid-January and will open Tuesday with a
in the short-term of over half a percent.
Although buyers have kept shares of
) from finishing near session lows on Monday, the stock has still
closed lower for three out of the past four trading days, and is at
its most technically oversold since climbing into
bull market territory
in the first half of January. With a short-term edge of more than a
third of a percent, shares of DOV have moved from neutral to
"consider buying" with a one-point ratings upgrade to 8 out of 10
midway through trading on Monday.
It's worth pointing out that if weakness in industrial stocks
becomes more widespread, the stocks in this report could become
even more oversold despite already earning top ratings and
developing statistically significant edges. The XLI, mentioned
above, has closed overbought for three out of the past five trading
days, including on Monday, as the fund edged back toward the top of
its now three-week long trading range.
Stock ratings provided courtesy of
. Information about quantified edges on stocks provided courtesy
is Editor in Chief of TradingMarkets.com