(Premium) January Consumer Staples Outlook

We raised Consumer Staples to overweight when we downgraded Energy in early December. We were rewarded with a bullish resolution from the 6-month relative consolidation pattern we’d been watching. We’re targeting the 2018-2019 highs for the ratio.

In last month’s outlook we highlighted Campbell Soup as a stock that could lead the charge. It’s since broken to new 52-week highs and is halfway to our target above 60.

General Mills is still moving towards the 161.8% retracement from the 2017-2019 decline. The target there is 95.

Monster Beverage is also coming out of a big base. If it’s above 100, we want to be long with a target of 115.

Archer Daniels could be the next to go. If it’s above 100, we’re targeting 135, the 423.6% Fibonacci extension from the entire 2015-2020 range.

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