Robert Half, Roper Industries Among Top-Rated Industrials

I began looking at weakness in industrial stocks on Monday (see our Hot List column “3 Industrial Stocks for Short-Term Traders”. Then, the story was that while there was some selling in a number of less familiar industrial stocks like Dover Corporation (NYSE: DOV), it would remain to be seen whether or not this weakness would spread to the sector as a whole.

And with the Industrial Select Sector SPDRS ETF (NYSE: XLI) pulling back toward technically oversold territory, it appears that traders and active investors alike may soon have the answer to that question. The XLI, which includes major industrial stocks from Caterpillar (NYSE: CAT) and General Electric (NYSE: GE) to United Technologies (NYSE: UTX) and Union Pacific (NYSE: UNP), was down only fractionally on Tuesday. But after moving sideways in a consolidation range for most of February, the ETF finally slid toward levels similar to those from two weeks ago when the fund pulled back for three out of four trading days.

The XLI will become especially attractive to high probability traders if it continues lower over the next few days. The last time XLI made consecutive lower closes in oversold terrritory was in late January. Finishing off the month with a four-day sell-off – including the two oversold closes just mentioned – shares of XLI rallied by more than two and a half percent over the next three days.

What are some of the stocks within the Industrial Select Sector SPDRS ETF that have already begun to retreat to levels where buyers have tended to start seeing value in the depressed shares?

Among those trading above their 200-day moving averages, shares of Robert Half International (NYSE: RHI) have pulled back to new, short-term lows after selling off by more than 1% in Tuesday’s session. Down four out of five trading days ahead of trading on Wednesday, RHI has neutral rating of 6 out of 10, and a positive, short-term edge of just over half a percent.

Down two days in a row and four out of the past five, shares of Roper Industries Inc. (NYSE: ROP) are back in technically oversold territory, and trading at the low end of a range that extends back to mid-January. In spite of the selling in the stock, ROP has a minimial short-term edge and neutral ratings of 6 out of 10. Additional weakness, beyond the stock’s 1% drop on Tuesday, will be critical to turn the correction Roper Industries into a more meaningful opportunity for short-term traders.

Note that the pullback in ROP has taken the stock to new, two-week lows.

With 7 out of 10 ratings, Stericycle (NASDAQ: SRCL) is the highest rated stock in today’s report on industrial stocks that have become short-term oversold in recent days. Shares of SRCL have only been trading in bull market territory since the beginning of the month, and the current sell-off in SRCL comes in the wake of the stock’s rally to its highest point since the summer of 2011.

SRCL has a positive edge of a third of a percent. The stock has closed lower for three days in a row, and is trading at new, short-term lows.

Stock ratings provided courtesy of PowerRatings. Information about quantified edges on stocks provided courtesy of The Machine

David Penn is Editor in Chief of