Industrial names have taken over the top of the NDW rankings. Today we talk about the strength and give you a list of ideas you could look towards for focused exposure.
Move over technology, there’s a new sheriff in town. Last Friday’s recent daily equity report touched heavily on the recent weakness stemming from the software space, a thorn in the side of a sector which has been an outstanding leader over the last few years. While it is certainly to early to conclude if the recent exhale for the tech space (or growthier areas in general) is just that or perhaps a symptom of something more, we will take today’s report to highlight the uptick in Relative Strength (RS) for the industrials group. The sector has stormed into the first position within NDW’s sector rankings, its highest ranking since a brief three day stint back in September 2024. Besides that, the group has earned a position within the top half of the rankings since 2022, speaking to the longer-term technically acceptable stature of the sector. The sector is the only one of the 11 to outscore the core S&P 500 index funds group on the Asset Class Group Scores Page, earning an impressive 4.85 average score at the time of this writing on 2/9.
Strength to open 2026 was largely pushed by an uptick in demand for aerospace and defense names. The subsector has been a point of strength due in part to increased global unrest, which we have highlighted in various sector highlights over the last few months. PPA (pictured below) is up nearly 13% so far this year, earning a strong 5.70 fund score. The fund has been on an RS buy signal for the better part of the last decade- having bested SPX by roughly 64% since October 2017 (+237% vs 174%, respectively.) Having reversed back up into X’s on its default chart with intraday action on 2/9/26, the technical picture for PPA is strong an continues to improve. While it is undoubtedly true the space is flirting with an overbought stature, continued heightened possibility for global unrest should continue to be a large tailwind, adding to the technical weight of the evidence. Aerospace and defense names have found their way into several of NDW’s premade models- PPA earning a spot in the Invesco Sector Seven Model & MISL marking one of the five holdings of the First Trust Focus Five- both of which are having stellar openings to 2026.
But every sector has focused points of strength similar to industrials and the aerospace and defense subsector. What is perhaps the most compelling option for continued industrials leadership is the apparent broad based improvement the sector has seen so far this year. To judge this, we can focus on the relative strength matrix below which includes both cap and equal weighted representatives from the 11 broad sectors. At the top, you’ll notice cap weighted representatives from both industrials and communication services sectors, followed closely by RSPN, the equal weighted industrials option. RSPT is the next best equal weight option, currently sitting in the 7th position. Point being- the sector appears to lead on both fronts and overall participation looks to be healthy underneath the hood, suggesting there may be plenty of technically strong stocks you could look to for focused exposure.
Speaking of, those of you looking for individual stock ideas may be best suited to journey over to the stock buy lists available on the platform. Linked here, the buy lists break down technically actionable (4 & 5 TA Score stocks) littered across each sector. You can also drill down specifically for low volatility, dividend, or small cap stocks for an even more focused list, or click into our ETF buy list which runs a similar scoring test over ETFs via our fund scoring system. Point being, there are currently 46 large cap industrial stocks that you can thumb through, the most of any sector. Keep in mind, some of these options will lean towards overbought territory… so remember to set alerts to be notified of desired price targets.
