Moving Average Analysis of the Consumer Staples Sector



Consumer staples sector

The consumer staples sector outperformed the market as every single stock of the sector marched upward. On Monday, December 21, 2015, the Consumer Staples Select Sector SPDR ETF (XLP) rose 1.1%. The following table shows the returns of the consumer stocks along with their respective moving averages.

The returns of these stocks on December 21 are as follows:

  • Avon Products (AVP): 3.4%
  • Tyson Foods (TSN): 1.2%
  • Kroger (KR): 1.4%
  • Constellation Brands (STZ): 2.0%
  • Reynolds American (RAI): 1.3%
  • J.M. Smucker (SJM): 1.2%
  • Mondelez International (MDLZ): 2.6%
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Moving average analysis

As we can see from the table above, consumer staples stocks have a beta that’s less than one, implying that these stocks are less volatile and hence referred to as defensive stocks. The only exception to that was Avon Products (AVP), with a beta of more than one. This suggests that AVP is a volatile stock. Its trailing-one-year return is -57.5% while its trailing-one-month return is 47.1%. Also, AVP’s return on Friday, December 20, 2015, was -4.0% while being 3.4% on December 21.

Tyson Foods (TSN), Kroger (KR), Constellation Brands (STZ), and J.M. Smucker (SJM) traded at prices that were above their respective 100-day, 50-day, and 20-day moving average values. This suggests an upward trend in the stock price movement of these stocks.

When compared to respective analysts’ stock price targets, the average growth potential in the stock prices of AVP, TSN, KR, STZ, RAI, SJM, and MDLZ is 11%.

These stocks have an average number of ten “Buy” recommendations, seven “Hold” recommendations, and one “Sell” recommendation.

Energy sector

The fall in crude prices continued as record high global oil production set in with Iran and Libya poised to introduce more barrels to the market. In addition, President Obama signed a law on Friday, December 18, 2015, lifting a 40-year old ban on US crude exports.

With such a supply glut in crude oil, US WTI (West Texas Intermediate) crude fell 0.7% to close at $35.8 per barrel, while Brent crude slid 1.4% and settled at $36.4 per barrel. As a result, the stocks of Cimarex Energy (XEC), Pioneer Natural Resources (PXD), Newfield Exploration (NFX), and Noble (NE) fell 5.1%, 4.6%, 3.8%, and 2.4%, respectively, on December 21.

Next, let’s look at the key stocks of the SPDR S&P 500 ETF (SPY) on December 21.


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