Quanta Services, Inc.
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$PWR: The outperformer momentum stock within $XLI

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Many will say not all industrials are created equal. Some stocks give more α- than others. Within the SPDR Industrial subsector ETF XLI we have stocks like Boeing which have done nothing for the last 5 years. On the other hand, we have midcap industrial stocks like PWR, TT and GEV whose chart looks amazing and has clear uptrends. What is common among these industrial names? All these industrials provide solutions to the Generational AI Data Center Build Solutions. Quanta Services PWR provides electrical and power solutions and components which go into building these data centers which need reliable power supply and high-quality equipment’s. In the chart below you can see the ratio chart of PWR vs $XLI. This indicates the performance dominance of PWR vs the industrial ETF XLI with the ratio touching the lows of 0.4. So instead of buying the index XLI, I would rather long PWR over $XLI.

Coming back to technical the stock is in a clear uptrend. During the April Bear market, the stock PWR took a plunge and lost almost 40% of the value and touched the 0.236 Fib Retracement level with RSI of 30. From the bottom of 230 $ the stock recovered 60% of its losses. With an RSI of 60 the stock is still not in overbought territory. If the stock follows the same price pattern and touches the upper limit of 4.236 Fib retracement level, then we can see a 380 – 400 $ stock before we turn cautious.

Verdict: Long PWR over $XLI. Best industrial momentum stock. 400 $ target price.

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