Jim Cramer highlights a number of industrial companies in his Real Money column "The Market Is Hungry for Industrials" including Illinois Tool Works (ITW) . Cramer writes that, "ITW is a terrific company that stumbled a couple of years ago and has come roaring back. It's rally has been relentless, up 15% with a 35 P/E. Some may think it has run too much. I look at it differently. In a momentum driven market it's a real favorite"
We last looked at ITW way back on April 3 and a lot has changed. In April we wrote that, "While the fundamentals of ITW may have improved I suspect that prices are more likely to trade sideways from here for several weeks. It is not time yet to get involved from the long side."
Let's check out the latest ITW charts.
In the daily bar chart of ITW, below, we can see that the shares traded sideways until the middle of May and then began a rally into October. Prices are above the rising 50-day moving average line and above the rising 200-day moving average line.
The On-Balance-Volume (OBV) line bottomed in March/April and has slowly improved into September, It looks like the OBV line has turned sideways now. The Moving Average Convergence Divergence (MACD) oscillator recently turned upwards from the zero line for a fresh buy signal.