LIVE MARKETS-Consumer staples sector may be set for turnaround, SentimenTrader says
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CONSUMER STAPLES SECTOR MAY BE SET FOR TURNAROUND, SENTIMENTRADER SAYS
US consumer staples stocks are showing signs of a potentially durable recovery after a sharp improvement in market breadth was accompanied by a surge in corporate insider buying, according to SentimenTrader.
The traditionally defensive sector has lagged growth-oriented areas of the market in recent years as investors poured money into technology and artificial intelligence-linked stocks. But recent technical and sentiment indicators suggest the backdrop may be turning more favorable for consumer staples shares.
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%, suggesting a significant breadth thrust, according to SentimenTrader.
Furthermore, insider activity has turned notably bullish. A ratio that measures corporate insider buying and selling for the Consumer Staples Select Sector SPDR Fund recently jumped to 0.12, a level indicating unusually strong buying by company executives and directors relative to selling, according to SentimenTrader.
"Through the powerful confluence of this extreme breadth momentum thrust and surging corporate insider buying activity, the Consumer Staples sector is currently presenting a highly attractive medium-to-long-term risk/reward profile," SentimenTrader said.
(Chibuike Oguh)
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