Consumer staples sector may be set for turnaround, SentimenTrader says
XLP•SentimenTrader says consumer staples stocks may be recovering, with the share trading above their 50-day moving average rising from less than 10% to more than 67%. Insider buying tied to the Consumer Staples Select Sector SPDR Fund also surged, with its buying-to-selling ratio reaching 0.12.
1. Breadth improves
US consumer staples stocks are showing signs of a potentially durable recovery after a sharp improvement in market breadth and a surge in corporate insider buying, SentimenTrader said. The sector has lagged growth-oriented areas of the market in recent years as investors poured money into technology and artificial intelligence-linked stocks.
2. Insider buying rises
The percentage of consumer staples stocks trading above their 50-day moving average climbed from less than 10% earlier this month to more than 67%. A ratio measuring insider buying and selling for the Consumer Staples Select Sector SPDR Fund recently jumped to 0.12, indicating unusually strong buying by executives and directors relative to selling, SentimenTrader said. The firm said the combination of the breadth improvement and insider buying presented an attractive medium-to-long-term risk/reward profile.
