Scalper1 News
The stock market has had a defensive posture for a while, and growth stocks generally remain out of favor. The good news is that if you’re looking to add some defensive names to your portfolio, it’s not too late. The strength in gold, utility and consumer staple stocks has been well documented, but the stock market continues to grapple with uncertainty across many fronts, so it still makes sense to have some exposure to defensive companies. Be careful not to chase, though, because many have been running higher for a while. In the meat products group, for example, Tyson Foods ( TSN ) and Hormel Foods ( HRL ) are well extended past proper entry points. But opportunities still exist in other defensive areas of the market. Keep in mind that defensive names sometimes don’t measure up to normal IBD growth standards; but that can be forgiven in the current market, where institutional investors are steering clear of growth. The SPDR Gold Trust ( GLD ), which tracks the physical price of gold, is holding near highs as it tries to clear a 120.94 cup-with-handle buy point. An Accumulation/Distribution of A points toward solid demand for shares in recent weeks. In terms of individual gold stocks, Newmont Mining ( NEM ) is trading near a 26.20 cup-with-handle buy point, while Randgold Resources ( GOLD ) is approaching the high end of a buy range from an 85.94 entry. Tight weekly closes for Randgold in recent weeks are a sign of strength and support. Both names are among the top five holdings of the Market Vectors Gold Miners ( GDX ) ETF. In the utility space, the Utilities Select Sector SPDR Fund ( XLU ) is still in buy range after reclaiming a 47.10 cup-with-handle buy point. One of its top holdings, Southern Co. ( SO ), is vying for a breakout from a long, saucer-shaped base with a 50.34 entry. Another top holding, American Electric Power ( AEP ), is still in buy range from a 63.73 buy point. In the packaged foods group, Campbell Soup ( CPB ) has made a nice run but is extended. Post Holdings ( POST ), on the other hand, is near the 70.08 buy point of a cup-with-handle base. Post offers a compelling growth story but also a fairly substantial debt load as a result of acquisitions. In 2014, the company closed its buy of Michael Foods for $2.45 billion. In 2015, it bought MOM Brands for $1.15 billion. In the cosmetics and personal care group, Prestige Brands ( PBH ) is working on the right side of a shallow, cup-shaped base. It’s also been growing through acquisitions like Post and carries a lot of debt. Some of the company’s popular brands include Chloraseptic, Clear Eyes, Luden’s, Dramamine and Efferdent. KeyBanc Capital Markets on Tuesday initiated coverage of Prestige Brands with an overweight rating. Scalper1 News
Scalper1 News