Industrials have rallied this week off of Donald Trump's Election Day victory, and one technician says that the sector is set to drive the overall market higher.
Rich Ross of Evercore ISI believes that even after the 4 percent rise for the industrial sector ETF (XLI) since Tuesday, the charts suggest that an even bigger rally is in store.
Ross points out that the ETF's post-election rally helped it to hit an all-time high on Thursday. This high came in the midst of a "textbook W formation," which is a "continuation pattern to the upside."
To determine how much higher XLI can go, Ross looks at a "trading range" that has been in place for XLI since 2014, with a low of $48 and a high of $58.
For Ross, this $10 range suggests another $10 move, which would take the ETF to $68 — a 12 percent rise from Friday's opening price. In midday trading, the ETF was down slightly to $60.70.
At the end of the day, Ross's bullish doesn't end at the industrials.
"When you look at this chart, it will be difficult not to be constructive or bullish, if you will, on the broader markets," Ross said Thursday on CNBC's "Trading Nation."
After all, the industrials are considered one of the classic cyclical sectors, rising when the overall market climbs and falling when it drops. To be bullish on the industrials, then, often means being bullish on the S&P 500.
