Eoin Treacy's view US Housing starts are up while excess inventory is steadily being chipped away at and the uncertainty of the election will soon be behind us. The Eurozone's debt issues remain a concern but the focus is now on resolution rather than crisis management. China's decennial leadership handover is progressing peacefully despite some high profile hiccups over the last six months. Japan is edging towards greater stimulus. Outside of these major economic regions, the rest of the global economy is getting on with day to day life and Asia remains the engine of GDP growth. There are of course some considerable challenges facing major economies but the question now is how much of this is already in the price?

Over the last 18 months, against a background of considerable economic uncertainty, the resources sector has experienced downward pressure. The commonality of this decline, particularly when compared to the relative and absolute performance of the consumer sector has been particularly poignant. Sentiment towards the sector generally has been moribund with widespread anxiety about the parlous state of various government finances. However as the possibility that perceptions may swing back toward a more optimistic perspective gains ground, there is potential for a rerating of the sector generally.

I clicked through a number of the resources oriented sections in my Favourites this morning to ascertain which shares are moving to positions of outperformance.

Among industrial metal miners Teck Resources posted an upside weekly key reversal in mid September and has rallied to test the region of the 200-day MA. A sustained move above it would suggest a return to demand dominance beyond the short term. Antofagasta rallied impressively in September to challenge the medium-term progression of lower rally highs. It has been ranging above the 200-day MA for a month and a sustained move below 1200p would be required to question potential for additional higher to lateral ranging. BHP Billiton has held an upward bias since June and has paused in the region of the psychological 2000p. A sustained move below 1900p would be required to question medium-term potential for additional higher to lateral ranging. Southern Copper broke successfully above $37 three weeks ago and continues to extend the advance. Grupo Mexico is testing the upper side of a more than year long range.

Coal producers came under some of the most aggressive selling pressure as US utilities expressed a preference for natural gas due to cost and regulatory influences. For the most part, they lost downward momentum from July. Peabody Energy found support near $20 from July and rallied to break its progression of lower rally highs 2 weeks ago. While somewhat overbought in the very short-term, a sustained move below $26.50 would be required to question medium-term recovery potential. Consol Energy found support in the region of the 200-day MA last week and would need to sustain a move below it to question potential for additional upside. Alliance Resource Partners LP (6.59%) has held an upward bias since April and a sustained move below $57.50 would be required to question medium-term potential for continued higher to lateral ranging.

Among steel producers US Steel has been ranging mostly above $20 since June and found support at that level again this week. A sustained move above $23.50 would suggest a return to demand dominance beyond the short term. Brazilian listed Gerdau has held a volatile uptrend since August 2011 and is currently testing the region of the 200-day MA.

Among engineering companies Atkins exhibits a triangular pattern suggesting that when it breaks out it will do so in an emphatic manner. It is currently rallying towards the most recent lower high and a sustained move above 747p would suggest a return to medium-term demand dominance. JGC Corp is building refineries, LNG plants and GTL plants globally and is among the best performing shares in Japan. It is somewhat overbought in the short term and increasingly susceptible to mean reversion. However, a sustained move below ¥2000 would be required to question medium-term scope for additional upside. General Electric broke successfully above $20 in July and has returned to test the region of the MA and its progression of higher reaction lows over the last month. Provided it continues to hold above the $20 area, the benefit of the doubt can continue to be given to the upside. Tenaris which produces steel pipes found at least short-term support this week in the region of €14 and the 200-day MA. A clear downward dynamic would be required to question potential for some additional upside.

Among the oil majors Chevron has returned to test the region of the 200-day MA and the upper side of the underlying range where it will need to find support if the benefit of the doubt is to continue to be given the benefit of the doubt. Exxon Mobil has a similar pattern. Conoco Philips is testing the upper boundary of an almost two year range. Royal Dutch Shell found at least short-term support this week in the region of 2200p. ENI is testing the upper side of its four-year base.

In the chemicals sector Syngenta has held a progression of higher reaction lows since July 2011 and continues to hit new highs. Air Liquide has pulled back to test the upper side of the underlying trading range and the 200-day MA. Linde and Lanxess share similar patterns while Eastman Chemical rallied impressively from the region of the MA last week to post new all time highs. Praxair continues to consolidate above $100.

In conclusion while perceptions of potential outperformance among the industrial sector remain muted to say the least, there is clear evidence of accumulation evident in many of the above sectors suggesting that an overly pessimistic outlook is inappropriate.