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Consumer Staples Stocks Are Holiday Laggards

Tickers in this article: ABV BUD CL GIS K KMB KO PEP PG XLP
NEW YORK ( TheStreet) -- It's the day after Christmas and all through the house we see evidence of consumer products and a tablet without a mouse. There are half full glasses of alcohol cheer, and empty bottles of dad's favorite beer. There are leftover cans of our favorite soft drink with dirty glasses left on the sink. The stockings were emptied of candy and stuff, from soaps to toothpaste to perhaps an ear muff. When accessing the sector we find overvalued stocks with charts that look like toppling blocks. Merry Christmas and a Happy New Year!

The consumer staples sector is the second most overvalued among the 16 sectors covered at, 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.