XLI Industrials

Industrials retraced gains in March, but the XLI sits at an oversold level within the context of a bullish intermediate-term price structure. We bet on stronger trends rather than weaker ones generally and our process favors Industrials in April.

Industrials have benefitted from a clear investor shift towards cyclicality and Value stocks in early 2026.

The sector remains a diverse exposure that has remained in the middle of the road as investors have rotated between Growth, Cyclical and Low Vol. exposures at different points in 2025.

We think Fed Easing against a backdrop of slowing economic growth is more likely to benefit Growth Stocks than Value Stocks which keeps us negative on the Industrial sector going into December.

We’ve gone long the Industrials sector despite near-term weakness. It is less weak than many sectors despite lackluster performance.

Onshoring and AI implementation remain tailwinds offsetting weakness in Transports and Industrial Services segments.