Consumer Staples Stocks Are Holiday Laggards
The consumer staples sector is the second most overvalued among the 16 sectors covered at www.ValuEngine.com, overvalued by 15.4%. The alcoholic beverage industry is 12.1% overvalued with soft drinks 9.2% overvalued while cosmetics and toiletries are 8.0% undervalued.
In tracking the sector technically I look at the daily and weekly charts for the Consumer Staples Sector SPDR Fund (XLP) .
The daily chart for XLP ($35.06) gapped below its 50-day simple moving average at $35.50 on Friday, but stayed above its 200-day SMA at $34.91 on Monday. The daily chart profile is negative, which is a technical warning that consumer staples stocks have lagged during the 2012 holiday shopping season.
The weekly chart profile (not shown) provides another warning for the sector given a close this week below the five-week modified moving average at $35.57. My annual value level is $32.87 with a weekly pivot at $35.41 and monthly risky level at $36.39.
Chart Courtesy of Thomson/Reuters
In prior posts covering the consumer staples sector on Aug. 6 I wrote, Book Profits in Overvalued Consumer Staples, and on Sept. 18 wrote, Continue to Book Profits in Consumer Staples. Today I profile two consumer staples stocks rated strong buy and seven that are rated buy giving investors and traders my latest buy-and-trade guidance.
Reading the Table
OV/UN Valued: Stocks with a red number are undervalued by this percentage. Those with a black number are overvalued by that percentage according to ValuEngine.
VE Rating: A "1-engine" rating is a strong sell, a "2-engine" rating is a sell, a "3-engine" rating is a hold, a "4-engine" rating is a buy and a "5-engine" rating is a strong buy.
Last 12-Month Return (%): Stocks with a red number declined by that percentage over the last 12 months. Stocks with a black number increased by that percentage.
Forecast 1-Year Return: Stocks with a red number are projected to decline by that percentage over the next 12 months. Stocks with a black number in the table are projected to move higher by that percentage over the next 12 months.
Value Level: Price at which to enter a GTC limit order to buy on weakness. The letters mean; W-weekly, M-monthly, Q-quarterly, S-semiannual and A-annual.