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The State Department is again warning Americans not to travel to Venezuela due to high levels of crime and civil unrest under the socialist dictatorship of Venezuelan President Nicolás Maduro. 

The department has re-issued a ‘Level 4: Do Not Travel’ travel advisory, its most serious warning.

‘Do not travel to Venezuela due to crime, civil unrest, kidnapping, and the arbitrary enforcement of local laws,’ the notice on the State Department’s website reads. ‘Reconsider travel due to wrongful detentions, terrorism, and poor health infrastructure.’

‘Violent crimes, such as homicide, armed robbery, kidnapping, and carjacking, are common in Venezuela,’ the notice reads.

The State Department says there is a ‘high risk of wrongful detention of U.S. nationals in Venezuela’ and that security forces have detained U.S. citizens for up to five years, with the country not generally notifying the U.S. about detentions or granting access to citizen prisoners there.

Political rallies and demonstrations occur, often with little notice, the advisory states.

‘Anti-Maduro demonstrations have elicited a strong police and security force response, including the use of tear gas, pepper spray, and rubber bullets against participants, and occasionally devolve into looting and vandalism. Shortages of gasoline, electricity, water, medicine, and medical supplies continue throughout much of Venezuela.’

Maduro is vying for re-election against Edmundo Gonzalez, a veteran ex-diplomat who was named the main opposition candidate after primary winner Maria Corina Machado had a ban on holding office upheld by the Supreme Court, a move condemned by the U.S. at the time. Machado has since given Gonzalez her backing.

The U.S. reimposed oil sanctions on OPEC-member Venezuela last month, accusing Maduro of not fully complying with deals reached with the opposition to ensure free and fair elections. With a recent poll showing any candidate backed by Machado having more than double Maduro’s support, opposition members have warned the ruling Socialist party could take action to bar Gonzalez from appearing on the ballot.

Maduro’s 2018 re-election was rejected by Western governments.

In March 2019, the State Department withdrew all diplomatic personnel from the U.S. Embassy in Caracas and suspended all consular services as well as routine and emergency services.

‘The U.S. government has no ability to provide emergency services to U.S. citizens in Venezuela. U.S. citizens in Venezuela who require consular assistance should try to leave the country as soon as safely possible to do so and should contact a U.S. embassy or consulate in another country.’

Meanwhile, the State Department also says that Colombian terrorist groups operate in Venezuela’s border areas with Colombia, Brazil and Guyana.

The notice comes at a time when Venezuelans are fleeing the country in droves and heading to the U.S.

The Federation for American Immigration Reform issued a report in January highlighting how the number of Venezuelans coming to the border has skyrocketed from 50,000 in FY 21 to nearly 335,000 in FY 23.

The report also expresses concern about the potential for gang members from Venezuela to enter the U.S., as well as concerns about terrorism, given Venezuela’s close ties with Iran, which in turn sponsors Hezbollah and Hamas. It notes past congressional hearings that have highlighted how Venezuela has provided militants with travel documents.

Reuters contributed to this report.

This post appeared first on FOX NEWS

Hunter Biden arrived at a Delaware court just before noon Friday for a pre-trial hearing on federal gun charges, after multiple failed attempts by the first son to have charges brought against him dismissed. 

Hunter Biden pleaded not guilty to federal gun charges in the U.S. District Court for Delaware, after Special Counsel David Weiss charged him with making a false statement in the purchase of a firearm; making a false statement related to information required to be kept by a licensed firearm dealer; and one count of possession of a firearm by a person who is an unlawful user of or addicted to a controlled substance. 

Judge Maryellen Noreika will preside over the trial, which is set to begin on June 3. 

With all counts combined, the total maximum prison time for the charges could be up to 25 years. Each count carries a maximum fine of $250,000, and three years of supervised release. 

According to the indictment, Hunter Biden bought a Coldt Cobra revolver on Oct. 12, 2018, and ‘knowingly made a false and fictitious written statement, intended and likely to deceive that dealer with respect to a fact material to the lawfulness of the sale of the firearm… certifying he was not an unlawful user of, and addicted to, any stimulant, narcotic drug, and any other controlled substance, when in fact, as he knew, that statement was false and fictitious.’ 

The indictment also charges Hunter Biden for possessing that firearm — which was ‘shipped and transported in interstate commerce’ — for nearly a week despite being addicted to narcotics.

Fox News first reported in 2021 that police had responded to an incident in 2018, when a gun owned by Hunter was thrown into a trash can outside a market in Delaware.

A source with knowledge of the Oct. 23, 2018, police report told Fox News that it indicated that Hallie Biden, who is the widow of President Biden’s late son, Beau, and who was in a relationship with Hunter at the time, threw a gun owned by Hunter in a dumpster behind a market near a school.

Hallie Biden may be required to testify during Hunter Biden’s trial. 

A firearm transaction report reviewed by Fox News indicated that Hunter purchased a gun earlier that month.

On the firearm transaction report, Hunter answered in the negative when asked if he was ‘an unlawful user of, or addicted to, marijuana or any depressant, stimulant, narcotic drug, or any other controlled substance.’

Hunter was discharged from the Navy in 2014 after testing positive for cocaine.

Meanwhile, Weiss also brought federal tax charges against Hunter Biden in U.S. District Court for the Central District of California. 

Biden pleaded not guilty to those charges — specifically, three felonies and six misdemeanors concerning $1.4 million in owed taxes that have since been paid. Weiss alleged a ‘four-year scheme’ when the president’s son did not pay his federal income taxes from January 2017 to October 2020 while also filing false tax reports. 

On Wednesday, Judge Mark Scarsi heard arguments during a pre-trial hearing in California. That criminal trial was scheduled for June 20, but Hunter Biden’s attorneys requested to delay the trial. 

Scarsi sided with Hunter Biden’s attorneys, and moved the tax trial from June 20 to September 5, when jury selection will begin. 

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Justice Clarence Thomas, in the court’s latest decision upholding a GOP-drawn redistricting map in South Carolina, took aim at a key, decades-old civil rights decision, calling it an ‘extravagant [use] of judicial power.’ 

On Thursday, the Supreme Court sided with the Republican-led South Carolina legislature after it was challenged for alleged racial gerrymandering in drawing new redistricting maps. 

In a 6-3 decision, written by Justice Samuel Alito, the high court said that ‘a party challenging a map’s constitutionality must disentangle race and politics if it wishes to prove that the legislature was motivated by race as opposed to partisanship. Second, in assessing a legislature’s work, we start with a presumption that the legislature acted in good faith.’

In a concurring opinion, Justice Thomas wrote that the 1954 decision in Brown v. Board of Education – written by his predecessor, Justice Thurgood Marshall – introduced an ‘extravagant [use] of judicial power.’

The Brown decision said that separating children in public schools on the basis of race was unconstitutional, and overruled the ‘separate but equal’ legal doctrine. 

Thomas, who grew up in the segregated South, has repeatedly stated that the Constitution prohibits race-based discrimination, regardless of the intent, and its devastating effects. 

In the case last year banning affirmative action in college admissions, Thomas wrote a concurrence ‘to offer an originalist defense of the colorblind Constitution’ and to ‘clarify that all forms of discrimination based on race — including so-called affirmative action — are prohibited under the Constitution; and to emphasize the pernicious effects of all such discrimination.’

‘Individuals are the sum of their unique experiences, challenges, and accomplishments,’ he said. ‘What matters is not the barriers they face, but how they choose to confront them. And their race is not to blame for everything — good or bad — that happens in their lives.’

In 1995, Thomas wrote a lone concurrence in the case of Adarand Constructors, Inc v. Peña, stating that the government’s ‘benign discrimination’ that tries to help racial minorities who are ‘thought to be disadvantaged’ is another form of invidious ‘racial discrimination, plain and simple.’

Thomas’ point in his concurrence in the case decided Thursday is that federal courts are not qualified to determine how voting maps are designed.

‘The Constitution provides courts no power to draw districts, let alone any standards by which they can attempt to do so,’ he said.

‘And, it does not authorize courts to engage in the race-based reasoning that has come to dominate our voting-rights precedents. It is well past time for the Court to return these political issues where they belong — the political branches,’ he said. 

Thomas said that ‘the Court once recognized its limited equitable powers in this area.’ The federal courts have the power to grant either legal remedies, such as monetary damages, or equitable remedies, such as compelling or prohibiting a certain act.

‘We previously acknowledged that ‘[o]f course no court can affirmatively re-map [a State’s] districts so as to bring them more in conformity with the standards of fairness for a representative system. At best we could only declare the existing electoral system invalid.’’

But he said that the Brown decision – which was decided 70 years ago almost to the day of Thomas’ concurrence – introduced ‘[t]he view of equity required to justify a judicial mapdrawing power.’

‘The Court’s ‘impatience with the pace of desegregation’ caused by resistance to Brown v. Board of Education ‘led us to approve…extraordinary remedial measures,” he said.

Thomas explained that in the follow-up case to Brown, the Court considered ”the manner in which relief [was] to be accorded’ for vindication of ‘the fundamental principle that racial discrimination in public education is unconstitutional.’

‘In doing so,’ Thomas wrote, ‘the Court took a boundless view of equitable remedies, describing equity as being ‘characterized by a practical flexibility in shaping its remedies and by a facility for adjusting and reconciling public and private needs.”

‘That understanding may have justified temporary measures to ‘overcome the widespread resistance to the dictates of the Constitution’ prevalent at that time, but, as a general matter, ‘[s]uch extravagant uses of judicial power are at odds with the history and tradition of the equity power and the Framers’ design,’’ he said. 

‘Ultimately, to remedy racial gerrymandering or vote dilution, someone must draw a new map. I can find no explanation why that ‘someone’ can be a federal court [and not the state legislature],’ he said.

Thomas went on to say that the Supreme Court’s jurisprudence in redistricting matters ‘puts States in a lose-lose situation.’

He referenced the Court’s decision last term that ruled in favor of Black voters in Alabama challenging the state’s GOP-friendly congressional map, which the court’s majority found to be likely in violation of the Voting Rights Act. The VRA prohibits voting practices or procedures that discriminate on the basis of race.

But Thomas and two of his colleagues dissented, saying, ‘The question presented is whether [Section 2] of the Act, as amended, requires the State of Alabama to intentionally redraw its long-standing congressional districts so that Black voters can control a number of seats roughly proportional to the Black share of the State’s population. Section 2 demands no such thing, and, if it did, the Constitution would not permit it.’

Thomas, in his concurrence Thursday, argued that, ‘Taken together, our precedents stand for the rule that States must consider race just enough in drawing districts.’

‘And, what ‘just enough’ means depends on a federal court’s answers to judicially unanswerable questions about the proper way to apply the State’s traditional districting principles, or about the groupwide preferences of racial minorities in the State,’ he said.

‘There is no density of minority voters that this Court’s jurisprudence cannot turn into a constitutional controversy. We have extracted years of litigation from every districting cycle, with little to show for it. The Court’s involvement in congressional districting is unjustified and counterproductive,’ he concluded.  

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Defense Secretary Lloyd Austin will undergo a nonsurgical procedure Friday evening at Walter Reed Medical Center as a follow-up for a bladder issue he had earlier this year, the Pentagon said in a release.

The procedure is unrelated to his cancer diagnosis. 

The Pentagon said the White House and Congress have been notified, and that Austin will be temporarily unable to perform his duties during the procedure. 

As a result, ‘Deputy Secretary of Defense Kathleen Hicks will assume the functions and duties of the Secretary of Defense, and serve as the Acting Secretary of Defense,’ the Pentagon said.

Austin was diagnosed with prostate cancer and hospitalized in December, but didn’t tell the White House for several days at the time. 

This post appeared first on FOX NEWS

Sen. Lindsey Graham, R-S.C., said the United Nations’s International Court of Justice (ICJ) ‘can go to hell’ after the body ordered Israel to halt its military operations in southern Gaza. 

‘As far as I’m concerned, the ICJ can go to hell,’ he wrote Friday on X. ‘It is long past time to stand up to these so-called international justice organizations associated with the UN.’

‘The ICJ’s ruling that Israel should stop operations that are necessary to destroy four battalions of Hamas killers and terrorists – who use Palestinians as human shields – is ridiculous,’ he added. ‘This will and should be ignored by Israel.’

Friday’s ruling came as Israel continues military operations in Rafah, the last stronghold for Hamas, which has accused Israeli forces of killing civilians and children. The ICJ does not have the power to enforce the ruling. 

In 2022, Russia ignored the ICJ’s order that it stop its invasion of Ukraine. Graham also noted that the International Criminal Court (ICC) at The Hauge previously threatened action against U.S. forces for operations in Afghanistan. 

‘Under the theory espoused by the ICC to go after Israel, America would be a target. Sanctions need to be strong because if we fail to act to defend our friends in Israel, America will be next,’ he wrote. 

Earlier in the week, Graham criticized the ICC over its effort to seek arrest warrants for Israeli Prime Minister Benjamin Netanyahu and Israeli Defense Minister Yoav Gallant, as well as Hamas leaders, alleging war crimes and crimes against humanity.

On Friday, Graham said he was in talks with Senate and House members of both parties to potentially sanction the ICC for the warrants against Netanyahu and Gallant. 

This post appeared first on FOX NEWS

It was a roller-coaster week in the stock market, a reminder that, when markets are trading at their all-time highs, it pays to be cautious. Any negative news can trigger emotions, resulting in a domino effect reaction.

In the early part of the week, the stock market was pretty lethargic, with investors waiting for Nvidia’s earnings. When NVDA earnings were announced after the close on Wednesday, the stock price soared in after-hours trading. The upside move continued when the market opened on Thursday, with the stock price closing at a record high on Friday.

However, despite NVDAs’ rally, the rest of the market threw some surprises. On Thursday, there was a significant selloff, which threw many investors off. The broader equity indexes fell, as did precious metals.

The May Purchasers Manufacturing Index (PMI) came in higher than expected, which may have reminded investors that the strong economy could mean higher rates for longer. The FOMC minutes this week suggested that Fed members aren’t confident that inflation has come down enough to warrant rate cuts any time soon.

On Friday, the S&P 500 ($SPX) and Nasdaq Composite ($COMPQ) recovered some of Thursday’s losses. This was a surprise; you’d think the selloff would continue ahead of the Memorial Day weekend.

Follow the live chart!

Another interesting area is the price action in US Treasury yields, which seem to. be going through a consolidation pattern. Until they break out of this pattern, there’s no telling which way yields will go. The Fed is committed to bring inflation to 2%, but we don’t know how long it’ll take to get there.

CHART 1. 10-YEAR US TREASURY YIELDS IN CONSOLIDATION. Yields could break out in either direction. A lot depends on future economic data points. Chart source: StockCharts.com. For educational purposes.

A comforting thought is that the CBOE Volatility Index ($VIX) is low, indicating that investors aren’t fearful. This supports a bull market thesis. It’s challenging to forecast which direction the stock market will move, and we could see continued sideways movement for a while, especially after the FOMC minutes.

You can sense the presence of investor enthusiasm as stocks continue to reach all-time highs. Over 100 stocks hit an all-time high (check out the New All-Time Highs Predefined StockCharts scan). The New Highs-New Lows index ($NYHL) also shows more new highs than lows, although the number of new highs is not as high as it was in recent weeks (see chart below).

CHART 2. NEW HIGHS – NEW LOWS. The number of new highs is greater than the number of new lows. Chart source: StockCharts.com. For educational purposes.

A Few Stocks to Note

Follow the live chart!

Look at how First Solar (FSLR) performed this week. The stock surged, surpassing its last high of around $230 about a year ago. Despite FSLR’s rise, its relative strength compared to the S&P 500 index is at -32.81%. It’s got a lot of catching up to do.

CHART 3. FSLR JUMPS ON THE AI RIDE. The AI infrastructure needs to depend on energy companies and

What makes the stock appealing? FSLR has attracted the attention of analysts as a company that will benefit from the AI revolution. There’s a lot of talk about how the increased capacity of data centers will require energy, and FSLR could be one company that would benefit from the increased demand.

FSLR made it to three StockCharts Predefined Scans—New 52-Week Highs, Moved Above Upper Price Channel, P&F Double Top Breakout.

Another stock that hit a new high is Dell Technologies (DELL), again because of its contribution to the AI space. From the daily chart of DELL (see below), the stock is in an upward trend, and its relative strength index (RSI) has just crossed above the 70 level.

Follow the live chart!

The stock also reached the top 5 SCTR stocks (see end-of-week wrap-up below). Will the strength continue? We’ll find out when the company announces earnings next week.

CHART 4. DELL HITS NEW HIGHS. The stock has been gaining strength and is trading well above its 50-day simple moving average. Will earnings push this stock higher? Chart source: StockCharts.com. For educational purposes.

Closing Thoughts

With NVDA earnings in the rearview mirror, could FSLR or DELL be the next stock investors will get excited about? You can’t rule it out. This market hits you with surprises, so be prepared for anything. Even though the market went through its ups and downs this week, the overall sentiment appears to be bullish, a good way to start the holiday weekend.

End-of-Week Wrap-Up

S&P 500 closes up at 5,304.72, Dow Jones Industrial Average up 0.01% at 39,069.59; Nasdaq Composite up 1.1% at 16,920.79$VIX down 6.66% at 11.92Best performing sector for the week: TechnologyWorst performing sector for the week: EnergyTop 5 Large Cap SCTR stocks: MicroStrategy Inc. (MSTR); Vistra Energy Corp. (VST); Super Micro Computer, Inc. (SMCI); Vertiv Holdings (VRT); Dell Technologies (DELL)

On the Radar Next Week

Earnings from Salesforce (CRM), Abercrombie and Fitch (ANF), Dell Technologies (DELL).March Home PricesConsumer ConfidenceApril PCEFed speeches

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

In this edition of StockCharts TV‘s The Final Bar, Dave answers viewer questions from The Final Bar Mailbag. He outlines the differences between the MACD, PPO, and PMO indicators, covers the mechanics of corporate buybacks, examines the basics of candlestick analysis, and discusses whether applying trendline analysis to the VIX makes sense.

This video originally premiered on May 24, 2024. Watch on our dedicated Final Bar page on StockCharts TV!

New episodes of The Final Bar premiere every weekday afternoon. You can view all previously recorded episodes at this link.

In this episode of StockCharts TV‘s The MEM Edge, Mary Ellen reviews the broader markets and the rotation that’s taking place amid a rise in interest rates. She also takes a close look at NVDA and shares how you should handle the stock after last week’s 15% gain. Last up, she highlights key stocks that are due to report their earnings next week and what to be on the lookout for.

This video originally premiered May 24, 2024. You can watch it on our dedicated MEM Edge page on StockCharts TV.

New episodes of The MEM Edge premiere weekly on Fridays. You can view all previously recorded episodes at this link.

If you’re looking for stocks to invest in, be sure to check out the MEM Edge Report! This report gives you detailed information on the top sectors, industries and stocks so you can make informed investment decisions.

Dow Theory is based on the foundational work of Charles Dow, considered the “Father of Technical Analysis.” Many of the tools we employ to better analyze market structure and investor sentiment, from trend analysis to index construction, are derived from Dow’s original essays from the early 20th century.

Dow compared two indexes to gauge the strength of the economy: the Dow Industrials which represented the producers of goods, and the Dow Railroads, which tracked the distributors of goods. If both of these indexes confirmed new highs, then economic conditions were strong and the markets were in a bullish phase.

In the modern age of financial analysis, when the Dow Industrials and Dow Transports (which evolved from the original railroad index) do not confirm a new high, we have a “bearish confirmation,” which indicates trend exhaustion. One of my guests this week on The Final Bar, Jeff Huge of JWH Investment Partners, highlighted this Dow Theory signal, leading us to dig deeper into the methodology. Today, we’ll walk through what this indicator implies for stocks in Q2, and also explore two more modern versions of Dow Theory.

Here, we are showing the traditional version of Dow Theory, with the Dow Industrials in the top panel and the Dow Transports in the bottom panel. Note how the Dow Industrials made a new all-time high recently, pushing above 40,000 for the first time in history. Also note how the Dow Transports have not confirmed this recent high, actually trending lower over the last two months. Because only one of the indexes has made a new high, and that breakout was not confirmed by the other index, Dow would suggest that there is internal weakness in the market and a likely major market top.

Proponents of traditional Dow Theory would cite the long-term success of these signals, which have often provided an excellent early warning sign of danger ahead. Detractors would explain that the Dow Industrials index in 2024 includes lots of “non-industrial” names like banks and service companies. For example, technology stocks like Microsoft and Salesforce are part of the Dow Industrials! And companies like Amazon.com are not included in the Dow Transports, even though they have an exceptionally robust built-in distribution network.

So what else can we do to apply Dow’s theory in 2024? What about if we use the S&P 500 to represent the “old economy” names and the Nasdaq Composite to track the “new economy” companies?

When we go with this “New Dow Theory”, we realize that both the S&P 500 and Nasdaq Composite have already achieved new all-time highs in May 2024. So there is no bearish non-confirmation as we see with traditional Dow Theory. The problem with this approach? The mega-cap growth stocks dominate both of these market cap-weighted indexes! So we’re essentially double counting the largest names.

This has led to me to what I call the “Newer Dow Theory”, using equal-weighted indexes for the S&P 500 and the Nasdaq 100. This should effectively neutralize the mega-cap overweight, particularly in the S&P 500 index.

This is where things get a little more concerning for market bulls. While the S&P 500 has already made a new all-time high in Q2, the equal-weighted S&P is still below its March high. And the equal-weighted Nasdaq 100, while holding up quite well in recent weeks, has also failed to push to a new all-time high.

For now, this Newer Dow Theory comparison suggests market weakness, using Charles Dow’s simple analysis of market trends. As he determined over 120 years ago, an uptrend is a pattern of higher highs and higher lows. So, if the highs aren’t getting higher, the uptrend should be brought into question.

Thus, while traditional Dow Theory has already flashed a bearish signal, I’m watching this Newer Dow Theory as May transitions into June. If we get a bearish non-confirmation on this final chart, or if neither equal-weighted index manages to score another new high, market bears may be proven right as we enter the summer months!

RR#6,

Dave

P.S. Ready to upgrade your investment process? Check out my free behavioral investing course!

David Keller, CMT

Chief Market Strategist

StockCharts.com

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

The author does not have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author and do not in any way represent the views or opinions of any other person or entity.

While wealthier consumers benefit from higher stock and real estate valuations, lower-wage Americans are crushed by high prices, and many fall behind in credit card debt. Meanwhile, the Fed has been telegraphing that inflation may be much stickier than initially expected.

Still, consumers have to shop for basic staples, like groceries. If inflation persists, investing in staples makes sense. But large retailers that are also go-tos for “grocery” items are uniquely diversified, and their operations are differentiated and complex.

When considering major Consumer Staples sector companies such as Walmart (WMT), Costco (COST), Sprouts Farmers Market (SFM), and Kroger (KR), it’s important to note that Walmart and Costco are generally categorized under “General Merchandise Stores” or “Discount Stores.” In contrast, Sprouts and Kroger are categorized specifically under “Food Retailers.” However, all four companies compete in the grocery space—a vital arena considering today’s inflationary climate.

So, in light of this common ground of competition, how might you determine which companies might be more favorable/investible than the next?

The Four Retailers At–a-Glance

A big-picture glance at all four stocks using StockChartsACP Layouts shows that WMT, COST, and SFM are all exhibiting strong uptrends and have notched record highs. KR is the only stock among the four currently pulling back, having failed to challenge its 2022 high of $59.70.

CHART 1. DAILY CHARTS OF WALMART, COSTCO, SPROUTS FARMERS MARKET, AND KROGER. WMT, COST, and SFM are in all-time high territory while KR is dipping.Chart source: StockChartsACP. For educational purposes.

Walmart Gaps Up, But Can It Sustain Its Upward Momentum?

CHART 2. DAILY CHART OF WALMART. Note the breakaway gap with a strong historical tendency to keep moving higher. But where’s the volume behind the move?Chart source: StockCharts.com. For educational purposes.

WMT exhibited a strong surge post-earnings by way of a breakaway gap, which, by the way, has a low probability of getting filled within a week (1%), according to technical analyst Thomas Bulkowki. Yet, if you look at the volume, which shows little follow-up, it’s not the only indication that the stock may be due for a pullback. The Money Flow Index (MFI), a volume-weighted RSI, shows a flat-to-slightly-bearish diversion; its buying pressure falls as prices continue rising, indicating a potential pullback.

Still, its relative performance against the Staples sector (XLP) and the S&P 500 ($SPX) is relatively strong, nearly 15% and 10%, respectively. 

Although runaway gaps tend not to get filled right away, other technical factors say it’s bound to happen soon. Still, it’s up in the air. And you’d have to weigh this against the fundamentally informed analyst targets (and overall economic situation) to determine whether it’s a strong investment.

Costco is Skyrocketing Higher

Costco’s performance in comparison to its sector and the S&P 500—27% and 22%, respectively—is notable, but not exceptional. However, the MFI shows the stock is in overbought territory with a slight bearish divergence. This indicates that the buying pressure that has driven its valuation may be weakening. If COST experiences a pullback, it may find support at previous swing highs of $775.75 and $750.

CHART 3. DAILY CHART OF COSTCO. COST is surging ahead, yet watch out for the dwindling volume.Chart source: StockCharts.com. For educational purposes.

Sprouts Farmers Market’s Steady Uptrend

CHART 4. DAILY CHART OF SPROUTS FARMERS MARKET. Note that SFM, once a “hidden gem,” is among the most impressive performers in the staples sector.Chart source: StockCharts.com. For educational purposes.

Also in all-time-high territory is SFM. Covered last December in the article Sprouts Farmers Market: A Hidden Gem on the Corner of Wall and Main Street?, SFM’s rally turned out to be one of the more impressive performers in the sector. It’s outperforming its sector by nearly 78% and the S&P by a little over 70%, making it the strongest performer among the four in this article.

While SFM has entered “overbought” territory once again, and its decreasing volume doesn’t appear that it can sustain its rally without a pause, SFM is likely to continue surprising Wall Street in the quarters to come. So, it’s a stock you might consider after a favorable pullback and a strong indication of a bullish reversal.

Kroger: A Pullback or Reversion?

Kroger is the weakest performer among the four discussed in this article. Its most recent high at $59 is a third retest of its $59.70 high in 2022, after which, as you can see, it failed. However, if you are bullish on Kroger, or if you’re looking to accumulate it as part of a diversification strategy, you might want to wait for it to pull back to its 50% Fibonacci retracement level near the $51 range.

CHART 5. DAILY CHART OF KROGER. Is there still a reason to be bullish on KR? It’s the worst performer of the bunch. But if you want to accumulate KR, it’s approaching a reasonable buy level.Chart source: StockCharts.com. For educational purposes.

The Takeaway

Staples stocks might not be glamorous, but in a high-inflation environment, some of these seemingly boring stocks turned out to be the hottest performers on Wall Street. Major players like Walmart, Costco, Sprouts Farmers Market, and Kroger benefit from persistent demand for groceries. Notably, Walmart, Costco, and Sprouts are hitting all-time highs, while Kroger is lagging. Interestingly, 2024 analyst targets for these stocks have often been exceeded, highlighting Wall Street’s underestimation of their potential.

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.