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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.

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View this OptionsPlay on XLI