Safety In Spotlight:
The Monday blues gave some comfort to the “defensive” group as the utilities shined, actually besting the red hot energy space. Real estate and healthcare also held up “relatively” well. In 2022 staples have benefitted from strength mostly from tobacco and food product stocks. Names like ANDE BG and ADM are up between 15-20% YTD on a pretty miserable tape. Of course, leadership from these types of stocks is a clear indication that markets are fragile. On the opposite end of the spectrum, weakness in the personal products group has weighed. EL and ELF are both lower by more than 20% thus far this year, and Estee Lauder has now shaved nearly a third of its value from its peak made on the first trading day of the year. Below is the chart of the overall staples group and it is hanging on by a thread in a possible double bottom pattern. The third-largest component in COST is showing its superiority down 7% compared to main rival BJ which is 21% off its 52-week highs. Both look attractive at the moment as BJ recaptured its 200 day SMA in a very rapid fashion. Use a CLOSING stop of 54.