Tool Makers Form High Basing Patterns as the Economy Recovers: Technical Analysis

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Attention is shifting toward industrials as technology and the Nasdaq struggle. Two companies in the space have potentially bullish patterns: Illinois Tool Works (ITW) and Stanley Black & Decker (SWK).

ITW is the larger company with a market cap of about $68 billion. It broke out to new all-time highs in August and consolidated for the next seven months. Now the bulls may be ready to return.

First notice the high basing pattern above old resistance. It first held $190 on October 2, turning the pre-Covid peak into a new bottom. It made a slightly higher low four weeks later. ITW revisited this zone in late January, once again making a slightly higher low.

Meanwhile, a downward-sloping trend line took shape – only to be broken at the beginning of March.

For more, please click here to view the related idea and chart analysis on TradingView.

Illinois Tool Works (ITW), daily chart, with select indicators, courtesy of TradingView.
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