31 Dec

DIA May Rise after Triggering Bullish Crossover

WRITTEN BY Lara Sheldon

DIA has fallen only 0.8% over the past month

The Industrial Select Sector SPDR ETF (XLI), an industrial-focused fund, has fallen 2.9% over the past month as of December 30, 2015. Another fund, the SPDR Dow Jones Industrial Average ETF (DIA), fell a mere 0.8% over the same period.

DIA May Rise after Triggering Bullish Crossover

Financial services have the most weight in DIA

XLI has 99.4% weight in industrials, while DIA has a diversified sector holding. In DIA, financial services carry the most weight of 19.7%, followed by industrials at 18.9% and consumer cyclical at 18.6% as of November 29, 2015.

Due to a diversified portfolio holding, DIA has outperformed XLI over the past year. XLI has fallen 5.6% year-to-date as of December 30, 2015, while DIA has fallen 1.2% over the same period.

GS have the most weight in DIA

DIA’s top holdings include Goldman Sachs Group (GS), 3M (MMM), Boeing (BA), International Business Machines (IBM), and Home Depot (HD). GS holds the most weight in DIA at 7.2%. MMM and BA hold 5.9% and 5.5% weight, respectively, in DIA. IBM and HD have 5.3% and 8.0% weight, respectively, in DIA as of November 29, 2015.

DIA’s holdings performed poorly over the past month

Industrial stocks are performing poorly due to a decline in new orders and production over the past month. Of the top five holdings, four stocks have fallen from a month ago. GS, MMM, IBM, and HD have fallen 4.2%, 3.0%, 0.06%, and 0.40%, respectively, over the past month as of December 30, 2015. BA rose 0.66% over the same period.

Bullish crossover

In DIA, the 20-day moving averages for MMM, BA, and HD are crossing over the 100-day moving averages. This is considered a bullish crossover.

Analysts estimate a rise of 13.8%, 5.3%, 12.5%, 7.5%, and 5.9% for Goldman Sachs Group (GS), 3M (MMM), Boeing (BA), International Business Machines (IBM), and Home Depot (HD), respectively, in the next 12 months.

Manufacturing is struggling, but it’s yet to be seen how the technical bullish crossover may help industrial stocks and ETFs outperform.

For the latest updates on the economic front, visit Market Realist’s Global ETF Analysis page.

Latest articles

22 Jul

Economic Data and Earnings Before the Fed's Meeting

WRITTEN BY Mohit Oberoi, CFA

Economic data and earnings will keep investors busy this week. More than a quarter of the S&P 500 companies are scheduled to release their earnings.

22 Jul

Why UPS's Q2 Earnings Could Fall Year-over-Year

WRITTEN BY Anirudha Bhagat

UPS is scheduled to report its second-quarter earnings results on July 24. Estimates suggest that things aren't looking good for it this quarter.

Boeing (BA) plans to report its second-quarter 2019 results on July 24.

Hershey (HSY) is set to report its second-quarter results on Thursday. We expect Hershey’s sales and earnings to grow year-over-year, but that growth to be low.

22 Jul

Align Technology: What to Expect in Q2

WRITTEN BY Margaret Patrick

Align Technology (ALGN) plans to release its second-quarter earnings on July 24 after the market closes.

On July 19, Tilray was trading at a forward EV-to-sales multiple of 12.1x. The company was still trading at a premium to the peer median at 6.0x.