Consumer Staples is another sector seeing positive rotation. $XLP – July 17, 2024
This is Scott McGregor at Scott Trades on Twitter with StockMarketMentor.com and your Chart of the Day. I want to take a look at XLP ( NYSEARCA: XLP ). This is the Consumer Staples Fund.
XLP ( NYSEARCA: XLP ) is just another indication of that market rotation we alerted you to last week. When we looked at IWM ( NYSEARCA: IWM ), we saw that IWM ( NYSEARCA: IWM ) was setting up for a potential breakout. We did end up getting that breakout and it has since been quite extended, over four deviations above that 50-day moving average.
So the IWM ( NYSEARCA: IWM ) is now a known trade and we are looking for other sectors that may potentially have some rotation happening. I’m thinking of XRT ( NYSEARCA: XRT ) for example. I think this could definitely play catch up. And then, of course, tonight we’re looking at XLP ( NYSEARCA: XLP ).
This is Consumer Staples talking stocks like Walmart ( NYSE: WMT ), Costco ( NASDAQ: COST ), Proctor and Gamble ( NYSE: PG ), Altria ( NYSE: MO ), Coke ( NASDAQ: COKE ), Pepsi ( NASDAQ: PEP ), and the like. So definitely keep an eye on those stocks and this sector for continued rotation.
If you look at this chart it’s actually been setting up for a couple of months. We have this nice long consolidation base, chopping around the key moving averages, finding support right around that 50-day moving average. Even when it did close under the 50-day moving average they quickly brought it back up, and that’s what you want to see.
Anytime you see a stock under a key moving average, you want to see it brought up at least within a couple of days if not a week or two. It didn’t take them long to bring this back up above that 50-day moving average. We then had really nice tight price action and a break above a clear downward sloping trendline, coming on higher than average volume.
This tells me that this breakout probably has legs because it came out of a nice consultative base and did it today on great volume.
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