The Consumer Staples sector, while far from the best, has been on a solid run this year gaining 11.34% YTD. On a 1.42% gain over the past week, the sector, as seen through the XLP ETF, is now sitting in extremely overbought territory. Below we show several notable charts of stocks in the sector taken from our Chart Scanner tool.
Consumer product conglomerate Colgate-Palmolive (CL) was hit hard in the last quarter of 2018. After falling over 16% off of its highs all the way down to around $56 in the final days of October, the stock briefly rebounded back to summer lows before falling down again around $56-57 when the broader market bottomed. The stock rallied off of this double bottom and in January, it came back into this range and has broken out to the upside in late March. CL is now at its highest levels since this time last year. Estee Lauder (EL) similarly made a double bottom in late 2018 and has been in a decent uptrend, especially following a large gap up in response to its Q4 earnings. This uptrend has brought the stock up near 52-week highs.
There are a few other stocks within Consumer Staples that are also in solid uptrends: General Mills (GIS), Hershey (HSY), and Procter & Gamble (PG). While GIS has only really been rallying since the start of the year (after a range-bound 2018), HSY and PG have had their uptrends relatively uninterrupted for just about an entire year now. All three have been making 52-week highs recently, and while they are overbought at current levels, the general trend is still on their side.
On the other hand, Kellogg (K) has not been as fortunate to see these kinds of uptrends. The stock has been in a downtrend since the fall with a big dent coming in response to its November earnings report. Unlike most other companies, the start of 2019 was not a turning point. Fortunately, late last month the stock managed to break out above the downtrend line as well as the 50-DMA. It has made a higher low recently by bouncing off of the 50-DMA and has been working its way higher since.
Some other food-related stocks in the sector have seen some interesting movements in relation to resistance. Sysco (SYY) and Tyson Foods (TSN) have both broken out above resistance to new highs. SYY fell hard on its earnings report from last November, below prior support. In February, the stock failed to break out higher around these levels but on its next test of this resistance in the past couple of weeks the stock has surged; currently, it is pretty overextended as the most overbought stock in the sector. On the other hand, TSN was in a downtrend from December 2017 to December of 2018. This year it finally broke out of this downtrend and the stock has now come up to prior highs from late summer 2018. In the past few days, TSN has smashed through these levels and is at new 52-week highs.
Spice giant McCormick (MKC) is almost the opposite of TSN. After a solid rally through 2018, MKC held up in Q4 but eventually fell in December through late January. The stock rallied off of a bottom near $120 and has now run upon its prior highs at $155. On this test the stock is failing to break out, currently trading around $152 today. This is not necessarily a detrimental sign as the uptrend is still holding as of now. Like SYY, it could take another test of these levels for a breakout. Start a two-week free trial to Bespoke Premium to access our interactive economic indicators monitor and much more.