Illinois Tool Works is a global manufacturer of a range of industrial products and equipment. Co.'s segments include: Automotive OEM, which produces components and fasteners for automotive-related applications; Food Equipment, which is engaged in commercial food equipment; Test and Measurement and Electronics, which produces equipment, consumables, and related software for testing and measuring of materials and structures, as well as equipment and consumables used in the production of electronic subassemblies and microelectronics; and Welding, which produces arc welding equipment, consumables and accessories for an array of industrial and commercial applications.
When researching a stock like Illinois Tool Works, many investors are the most familiar with Fundamental Analysis — looking at a company's balance sheet, earnings, revenues, and what's happening in that company's underlying business. Investors who use Fundamental Analysis to identify good stocks to buy or sell can also benefit from ITW Technical Analysis to help find a good entry or exit point. Technical Analysis is blind to the fundamentals and looks only at the trading data for ITW stock — the real life supply and demand for the stock over time — and examines that data in different ways. One of these ways is called the Relative Strength Index, or RSI. This popular indicator, originally developed in the 1970's by J. Welles Wilder, looks at a 14-day moving average of a stock's gains on its up days, versus its losses on its down days. The resulting ITW RSI is a value that measures momentum, oscillating between "oversold" and "overbought" on a scale of zero to 100. A reading below 30 is viewed to be oversold, which a bullish investor could look to as a sign that the selling is in the process of exhausting itself, and look for entry point opportunities. A reading above 70 is viewed to be overbought, which could indicate that a rally in progress is starting to get crowded with buyers. If the rally has been a long one, that could be a sign that a pullback is overdue. |
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