A Buy The Dip Opportunity For Long-Term Investors

Whilst the industrials sector has only fallen about 7% from its highs set in May of this year, as proxied via the XLI ETF, the extreme washout of sentiment and breadth within the sector presents a potentially favourable buy-the-dip opportunity for long-term investors.

Beginning with sentiment, the SentimenTrader Optix measure of the pessimism and optimism of investors within the sector has fallen to extreme levels representative of decent buying opportunities over recent years. On the whole, investors are clearly pessimistic towards industrial stocks right now.


Whilst not at the same level of pessimism as the Optix measure above, the Bullish Percent Index (BPINDY) for the sector has fallen to a sub-50 reading. Such a level in the past has generally been indicative of attractive buying opportunities for those with a time frame of at least 12 months.