The Industrial Select Sector SPDR Fund (NYSE: XLI) recently broke above two critical resistance levels, indicating a shift in the industrial sector. The breakout has gone relatively unnoticed, as the attention remains on other key sectors and industries. However, with critical levels of resistance being taken out, investors should take notice of the industrial sector, specifically the XLI.

The XLI is an ETF that seeks to provide investment results that generally correspond to the performance of publicly traded companies in the industrial select sector index. The index includes companies from several industries, like machinery, freight and logistics, aerospace and defense, industrial conglomerates, and more.

The Recent Performance of XLI

Until recently, the XLI had been rangebound since the start of the year. However, after breaking above the channel's resistance, the ETF is now up 7.37% YTD and 23.25% over the last year. XLI has already gained 5.43% in June alone. While that YTD figure pales in comparison to the overall market, industrials' recent strength and outperformance warrant a closer look.

The convergence of key moving averages and contraction of the range in XLI created a good consolidation leading to a breakout pattern. At the beginning of June, the ETF broke above the first key area of resistance, around $100, and gained momentum into the following key area of $104. XLI had no trouble breaking above $104 and has since held above that critical zone, turning resistance into newfound support. Participants will be looking for that level to continue to act as support going forward. Based on the chart above, the next resistance level will be $108.

Of course, when considering an investment of participation in a sector-specific ETF like XLI, it is essential to analyze more than just the chart. Monitoring the top-weighted holdings is crucial since they significantly impact the performance of the ETF.

Three Top Holdings

Raytheon Technologies (NYSE: RTX) is the ETF top holding with a weighting of 4.98%. RTX has a Moderate Buy rating based on 11 analyst ratings and a predicted upside of 14.46% based on the consensus PT of $111.88. The company has a P/E of 26.06 and a dividend yield of 2.41%. The stock has an RSI of 52.85, indicating it is neither oversold nor overbought but trading moderately. RTX is trading in the middle of a higher timeframe channel, with support near $92 and resistance at $102.

Honeywell International (NASDAQ: HON) is the second largest holding with a 4.54% allocation. Analysts predict a 5.71% upside in the name based on a consensus PT of $214.56. The stock has a Hold rating based on 14 analyst ratings. HON has a P/E of 26.36 and a dividend yield of 2.03%. Although red YTD, shares have gained close to 10% over the last three months and recently broke above a critical level of resistance at $200.

If the stock can base over $200 and continue upwards, it could signal a key shift in momentum and contribute to further upside in the overall sector and ETF.

United Parcel Services (NYSE: UPS) is the third largest holding of XLI, with a current allocation of 4.44%. UPS has a Moderate Buy rating based on 24 analyst ratings and a predicted upside of 7.08% based on the consensus PT of $191.23. The stock has an attractive value P/E of 14.45 and a dividend yield of 3.63%. YTD, UPS is up 2.73%, thanks to its solid performance over the past month, gaining 4.41%.