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Money is flying out of the tech sector, and industrials are reaping the benefit.
The Nasdaq is down 4% in March. Tech leaders like Apple Inc. (NASDAQ: AAPL) and Amazon.com Inc. (NASDAQ: AMZN) have fallen near quarterly lows.
But industries like aerospace, heavy duty tools, agricultural equipment, and supplies are seeing a great run. The ETF that follows industrial stocks - the Industrial Select Sector SPDR ETF (NYSEArca: XLI) - is up 6% this month.
It's part of the ongoing rotation out of tech and back into value. Money managers are pulling clients out of the large-cap Nasdaq names that doubled in the past year and into stocks with more potential for healthy, double-digit gains in the next quarter.
Yesterday, Chris Johnson gave you three sectors he's eyeing for big April gains as money moves out of tech (and he'll give you three trade recommendations at his Live Webinar: Your April Trading Playbook today at 4 p.m.; go here for details). Today, I'm going to give you four stocks to play that are benefiting from this money migration.
They all have the potential to power through their recent highs and take investors on a nice ride to big gains - if you move fast...
The Industrial Sector Is Running - Here Are the Top Stocks to Play
The following companies have been leading the industrial sector this year. Now they have my attention because I think these highs will be broken through and we'll see even greater moves to the upside.
No. 1: Boeing Co. (NYSE: BA)
Defense company Boeing is up 13% this month and notched a 1-year high of $278.57 in the process. It has outpaced every other industrial stock and is poised for further upside.
Boeing, as most of you know, manufactures commercial and military aircraft, satellites, weapons, launch systems, and performance-based logistics and training. Its stock jumped 2.3% Monday when Southwest Airlines announced it would buy 100 of Boeing's 737 Max 7 planes. Southwest is retiring older jets in its all-Boeing 737 fleet.
No. 2: Snap-on Inc. (NYSE: SNA)
SNA is a designer, manufacturer, and marketer of high-end tools and equipment for professional use in the transportation industry. This includes automotive, marine, aviation, and railroad transportation.
No sooner had I hit "print" on this stock's price chart than it broke through its previous all-time high set earlier last week. SNA stock was up 3% for the month until Wednesday last week, when it shot up 8% more over three trading sessions, pushing it to an all-time high of $233.80. I anticipate more upward movement to come.
No. 3: Deere & Co. (NYSE: DE)
Deere is one of the most well-known names in equipment used in agriculture, construction, forestry, and turf care. The company set an all-time high of $392.42 this past Thursday.
It will also be a beneficiary of infrastructure spending because of its road construction equipment. President Biden has named infrastructure as his next spending target, and Wall Street is betting that'll pay off. Deere stock has been getting a lot of attention lately for being held in Cathie Wood's closely-followed ARK Invest ETFs.
No. 4: Stanley Black & Decker Inc. (NYSE: SWK)
You might have a garage or shed that looks like a Stanley Black & Decker showroom. It's the world's largest tools and storage company and the second-largest commercial electronic security company. The stock set an all-time high of $203.31 last week, one week after it hit an all-time high of $199.40, shown below.
Now, you could purchase these stocks flat out, but it's not the way to make the most money on these upward moves.
I recommend buying call options to supercharge your returns and reduce your risk.
Buying 30- to 60-day calls provides you the right to buy a specific stock at a specific price (strike) until a specific date (expiration). When you purchase one call contract, you buy the right (but not obligation) to control 100 shares of stock.
This way your call option increases in value when the underlying industrial stocks move up in price.
There's a lot more profit potential possible with options. To help you find out how to uncover it, I've combined my most lucrative trading strategies into one downloadable e-book. You could learn how to predict, with 95% accuracy, the movement of stocks, and I'll walk you through step-by-step how you could cash in big. You can get this guide for $1 right now - a buck. Click here to claim your copy.
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About the Author
Tom Gentile, options trading specialist for Money Map Press, is widely known as America's No. 1 Pattern Trader thanks to his nearly 30 years of experience spotting lucrative patterns in options trading. Tom has taught over 300,000 traders his option trading secrets in a variety of settings, including seminars and workshops. He's also a bestselling author of eight books and training courses.