Join +750K new investors every month who copy stock picks from billionaire's portfoliosSign Up Free

Pullback in consumer discretionary stocks is a buying opportunity - Fairlead Strategies

Published 2024-06-14, 11:56 a/m
© Reuters.
GM
-
EBAY
-
KMB
-
ROST
-
GRMN
-
COST
-
CL
-
WMT
-
STZ
-
HD
-
MAR
-
TGT
-
TJX
-
NKE
-
LOW
-
TSLA
-
CCL
-
TSCO
-
DECK
-
RCL
-
ABNB
-

According to analysts at Fairlead Strategies, the recent pullback in consumer discretionary stocks presents a buying opportunity. The sector, represented by the Consumer Discretionary Select Sector SPDR Fund (XLY), is currently range-bound within its cyclical bull trend.

The firm believes a bounce is underway and is likely to extend in the near term, supported by a counter-trend rally in Tesla (NASDAQ:TSLA). Minor resistance is noted near $180, with more significant resistance around $185 from the March high. Key support for XLY is around $170.

Despite recent downside momentum relative to the S&P 500 (SPX), Fairlead Strategies suggests using the pullback to add exposure to consumer discretionary stocks emerging from corrective phases.

Notable picks include Carnival Corporation (NYSE:CCL), Ross Stores (NASDAQ:ROST), and Constellation Brands (NYSE:STZ). The analysts advise holding existing positions in strong uptrend stocks such as Colgate-Palmolive (NYSE:CL), Chipotle Mexican Grill (CMG), Costco (NASDAQ:COST), Deckers Outdoor (DECK), Garmin (NYSE:GRMN), Royal Caribbean (NYSE:RCL), TJX Companies (NYSE:TJX), Tractor Supply (NASDAQ:TSCO), and Walmart (NYSE:WMT) while waiting for potential dips to add new exposure.

For stocks showing long-term turnarounds or counter-trend upmoves like eBay (NASDAQ:EBAY), General Motors (NYSE:GM), Kimberly-Clark (NYSE:KMB), Nike (NYSE:NKE), and TSLA, analysts recommend maintaining positions but managing risks with stop-loss strategies.

They also suggest watching for oversold upturns in names near support, such as Airbnb (NASDAQ:ABNB), Home Depot (NYSE:HD), Lowe's (NYSE:LOW), Marriott (NASDAQ:MAR), and Target (NYSE:TGT).

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.