In this more highly volatile market environment, we gravitate toward defensive sectors such as consumer staples. Like healthcare, featured yesterday, it has been a source of positive momentum and relative strength of late.
Here is our latest idea: Tyson Foods (TSN, $85.75)
Keeping along the more defensive theme, we find redeeming technical qualities in TSN that differentiate it positively, suggesting it will (at least) be able to outperform the S&P 500 Index.
Momentum is positive behind TSN according to short-, intermediate-, and long-term trend following gauges. This is unlike many stocks that have seen MACD “sell” signals in this environment.
The recent breakout above the May and August peaks presents a positive catalyst, putting next resistance at the 2019 highs near $94. The breakout point becomes a gauge of forward-looking support near $82.
TSN has a breakout versus the SPX, as well, which positions it for additional outperformance. Overbought conditions could generate consolidation in absolute terms, but we would view it as temporary.
Tyson Foods (TSN, $85.75)
Long-Term Target: $94.07
Stop Loss: $81.79