China's manufacturing grew at the fastest pace in two years and euro-area services and factory output shrank less than economists forecast in surveys for January, adding to signs of resilience in the global economy.

A euro-area composite index based on responses from purchasing managers in both industries rose to 48.2 from 47.2 in December, London-based Markit Economics said today. Economists forecast a reading of 47.5, according to the median of 22 estimates in a Bloomberg News survey. Markit's factory survey in China was at 51.9, up from 51.5 in December.

European Central Bank President Mario Draghi suggested this week that the worst of the debt crisis may be over, while investor confidence in Germany, Europe's largest economy, rose to the highest in 2 1/2 years. That optimism and the prospect of China keeping up its growth pace are encouraging economists even after the International Monetary Fund cut its forecast for global expansion and Spain's unemployment reached a record.

Eoin Treacy's view Apple is grabbing headlines at present because its growth has slowed due to increased competition and higher costs. The share's weighting, particularly in the Nasdaq, ensures that it has a long reach in terms of its effect on sentiment but it is by no means the only company reporting earnings at this time and the outperformance of the manufacturing and industrials sector more generally is particularly notable.

3M reported improving demand in its consumer sector while Xerox beat expectations. As we have pointed out on a number of occasions since the summer, a high degree of commonality is evident in the industrials sector and it has moved to a position of outperformance relative to the wider market. At this stage I thought it might be instructive to revisit some of the relevant shares. (Also see Comment of the Day on November 16th) .

Among industrially oriented S&P 500 Dividend Aristocrats 3M (2.37%) found support in the region of the 200-day MA from November and has rallied impressively to post new all-time highs. While somewhat overbought in the very short term, a sustained move below the MA, currently near $90, would be required to question medium-term scope for additional upside.

Leggett Platt (3.87%) broke out of an 18-month range in October and is swiftly approaching its 2005 peak near $30. While some consolidation of recent powerful gains is looking increasingly likely, a sustained move below $27 would be required to question medium-term upside potential.

Genuine Parts (2.96%) has been ranging mostly above $60 for a year and has returned to test the upper boundary. A sustained move below the 200-day MA, currently near $62.50 would be required to question medium-term scope for additional upside.

Dover Corp (1.98%) has rallied for 14 of the last 15 weeks and is approaching an area of potential resistance near the upper side of its 2-year range. Some consolidation of recent gains is looking increasingly likely.

Illinois Tool Works (2.28%) hit a new all-time high in October and spent the next few months consolidating in the $60 area. It broke out again three weeks ago and a sustained move below $60 would be required to check medium-term upside potential.

Outside of the S&P500 Dividend Aristocrats, General Electric (3.17%) continues to range above $20 and a sustained move below that area would be required to question recovery potential.

Honeywell (2.22%) continues to extend its breakout to new all-time highs and while it is becoming somewhat overbought in the short term, a clear downward dynamic will be required to check momentum beyond a brief pause.

Berkshire Hathaway broke successfully above $90 at the beginning of the month and it is becoming increasingly overbought as it approaches the 2007 peak near the psychological $100. . Nevertheless it is well underpinned by the three-year congestion area and a sustained move below the 200-day MA, currently near $87 would be required to question medium-term upside potential.

Eaton Corp ((2.65%) has paused in the region of the 2011 highs over the last month in a gradual reversion towards the mean. A sustained move below the 200-day MA, currently near $48.90, would be required to question medium-term upside potential.

Ingersoll Rand (1.25%) is also in the region of a potential area of resistance but a break in the medium-term progression of higher reaction lows would be required to question potential for continued upside.

Parker Hannifin (1.73%) broke successfully above $30 last week and a clear downward dynamic would be required to check medium-term upside potential.

Cooper Industries (1.53%) is in the process of forming a downside weekly key reversal suggesting a peak of at least near-term significance has been reached. It will need to hold above the $70 region on the current pullback is the benefit of the doubt is to continue to be given to the medium-term upside.

Flowserve (0.93%) has rallied particularly impressively over the last six months but is more than 25% overextended relative to the 200-day MA and susceptible to mean reversion.

Roper Industries 0.49%) continues to trend consistently higher having held a progression of higher reaction lows since 2011. While somewhat overbought in the short-term, a sustained move below the MA would be required to question medium-term upside potential. The share would be best bought following one of its periodic pullbacks.

Textron 0.28%) has rallied to test the upper side of its more than two-year base and a sustained move above $30 would confirm a return to medium-term demand dominance.

When the above shares are considered, a considerable number have promising medium-term upside potential as they complete lengthy consolidations. However short-term overbought conditions are increasingly evident and the risk of some consolidation has increased. As the S&P500 tests the psychological 1500 area and with the VIX Index at its lowest reading since 2007 the first clear downward dynamics are likely to signal peaks of at least short-term significance.