(Premium) April Consumer Discretionary Outlook
(Premium) April Consumer Discretionary Outlook
Consumer Discretionary is among the top-performing sectors this year, thanks to its heavy exposure to growth and tech-like companies. The sector’s rally follows a failed breakdown below its pre-COVID highs. As is so often the case, a failed move was the catalyst for what looks to be a trend reversal.
The equally weighted sector is lagging so far in 2023, but it’s basing for another move higher. We think that’s constructive for both the sector and the market overall – more stocks participating in uptrends is a good thing, and Consumer Discretionary might be the single most diverse sector in the S&P 500.
Specialty retailers and restaurants are where we’re seeing the most positive action. Ulta Beauty is moving higher once again after taking a few weeks to digest the 161.8% retracement from the 2019-2020 decline. The next key Fibonacci level is at 755.
We’re still positive on the auto parts retailers. Autozone and O’Reilly are in long-term uptrends.
Tractor Supply is testing last year’s highs, and a breakout would set the stock up for some big potential gains. If TSCO is above 240, we want to be long with a long-term target of 360, which is the 685.4% Fibonacci retracement from the 2015-2017 decline.
McDonald’s just broke out of an 18-month base, the top end of which was the 161.8% retracement from the 2019-2020 selloff. We like it with a target above 350, but only if it’s above 275.
Starbucks found support at its own 2019 highs. With that area acting as support, we think it can go back to its all-time highs at 125.
View the rest of our April outlook:
April Technical Market Outlook
(Premium) April FICC Outlook
(Premium) April Information Technology Outlook
(Premium) April Communication Services Outlook
(Premium) April Consumer Discretionary Outlook
(Premium) April Industrials Outlook
(Premium) April Financials Outlook
(Premium) April Energy Outlook
(Premium) April Materials Outlook
(Premium) April Health Care Outlook
(Premium) April Consumer Staples Outlook
(Premium) April Real Estate Outlook
(Premium) April Utilities Outlook
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