As markets hold close to all-time highs, one technician sees the industrial sector readying itself for an even larger move higher.
"I see a very powerful chart here [on the XLI industrial ETF] that is just aching to break potentially on resolution with the trade conflicts with China," Todd Gordon, founder of TradingAnalysis.com, said on CNBC's "Trading Nation" on Tuesday. "As you can see, we are just knocking on the ceiling up around the $81-$82 region multiple times here."
The XLI ETF has struggled to break above $80 since early fall last year. It has gained 2% this month, roughly in line with the S&P 500.
"The market really, really wants to break through here. I would like to put an option trade on in XLI to take us through the zone of resistance potentially into the $85 region towards the end of the year into early 2020," he added.
The XLI's top components also support a break higher, says Gordon. Boeing, for example, looks to be holding between $322 and $330, Honeywell has been able to break through $180, and United Technologies is bumping against resistance at $145.
To take advantage of a move higher, Gordon is buying the 80 call with Dec. 20 expiration and selling the 85 call.