The consumer staples sector consists of companies that produce essential products like food and household items. Currently, market segments such as consumer staples, commodities, and utilities are not as popular as discretionary items like electronics and autos. In this article, we will examine various securities with strong exposure to the consumer staples sector and predict how traders may position themselves in the coming months.
Key Takeaways:
– The consumer staples sector is currently less favored by traders compared to other segments like health care and technology.
– Support levels indicate that consumer staples may be a sector to watch in the future.
– Bullish crossovers between the moving average convergence divergence (MACD) indicator and its signal line on many consumer goods charts could signal a move higher.
iShares Global Consumer Staples ETF (KXI):
Active traders often use exchange-traded products like the iShares Global Consumer Staples ETF (KXI) to gain exposure to specific sectors. This ETF, with 91 holdings, represents a global sector view. The price of the fund has been consolidating after breaking above the 200-day moving average, indicating potential for a move higher.
The Coca-Cola Company (KO):
The Coca-Cola Company, a top holding in the KXI ETF, has recently approached a significant support level. The horizontal trendline and 200-day moving average have influenced the stock’s price over the past year. A bullish crossover between the MACD and its signal line could signal a short-term buy opportunity, with short-term target prices near 2020 highs.
Walmart Inc. (WMT):
Walmart Inc., another top holding in the KXI ETF, saw a bounce from the support of the 200-day moving average, indicating bullish momentum. Traders may consider placing stop-loss orders below $135.71 for risk management.
Tip:
Consumer staples are non-cyclical products that are always in demand regardless of economic conditions. People tend to buy consumer staples at a relatively constant level, regardless of price fluctuations.
The Bottom Line:
The consumer staples sector is currently undervalued compared to other sectors, but with strong support levels and uptrends, it may be poised for a move higher in the coming months. The Importance of Regular Exercise
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