Industrial Sector Watch: Three Stocks That Might Undermine Portfolios in July 2024

Investors who prioritize momentum in their investment strategy should be vigilant this month regarding certain industrials sector stocks. As of July 17, 2024, momentum indicators, particularly the Relative Strength Index (RSI), suggest that three specific stocks merit caution. The RSI, which measures the magnitude of recent price changes to evaluate overbought or oversold conditions in the price of a stock, can be a red flag for momentum traders when it reaches certain levels.

Assessing the Risk in Industrials

Among the stocks flashing potential warning signs is GTES, also known as Gates Industrial Corporation plc. With operations spanning across the globe, the Denver, Colorado-based company specializes in engineered power transmission and fluid power solutions. Investors should closely watch any negative momentum that might hint at a downturn.

Another stock that could be a concern for momentum investors is FLR, or Fluor Corporation. The company, headquartered in Irving, Texas, is a heavyweight in the engineering and construction space, offering a diverse range of services worldwide. A faltering RSI could signal troubles ahead for this global enterprise.

Lastly, caution might be advised for shares of UL, representing Unilever PLC. This fast-moving consumer goods giant has a stronghold in various regions including Asia, Africa, the Middle East, and parts of Europe and America. With its headquarters in London, United Kingdom, Unilever's stock performance should be carefully monitored for any signs of declined momentum.

Investors are reminded to consider the RSI among other indicators and perform their own due diligence before making any trading decisions. The market is dynamic, and while momentum is a significant aspect for many, it should be evaluated in the broader context of a stock's fundamental performance and market conditions.GTES, FLR, UL