On Friday’s CNBC’s Options Action, the crew analyzed the relative performance of the Industrial Sector. Despite having a large run higher in the past 3 months, the outperformance came from 3 trading sessions prior to the election, removing the idea of a Trump trade. XLI has underperformed the market since the election on a relative basis and shows signs of exhaustion. Coupled with very high valuations from many of the constituent stocks, the crew expects a pullback in Industrials. Michael Khouw suggested buying an April 65/52 Put Spread for a $0.70 Debit.
We’ve structured this trade in OptionsPlay so you can analyze and view this trade along with the supporting technical chart at your convenience. You can also view the Options Action’s video by clicking on the following link: CNBC Options Action