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XLP stock has a rising large players volume as of January 16, 2022, as larger investors rotate into defense names.
Defensive Rotation
Investors appear to be increasingly seeking shelter with fundamentally sound, dividend-paying consumer staples stocks.
Despite inflationary pressures, supply chain constraints, and surging COVID-19 cases, the launch of new products to keep pace with changing consumer tastes has enabled defensive consumer staples companies to expand their market reach.
What Are Consumer Staples?
Consumer staples are things like foods and beverages, household goods, and hygiene products. These products are in demand regardless of someone’s financial situation because they either need them, or it would negatively affect the quality of life without them.
Consumer staples are generally non-cyclical, meaning that they are always in demand at a relatively constant level, year-round, no matter how good or bad the economy is doing. As such, consumer staples are generally impervious to business cycles.
In my own experience, consumer staples get hit during a Bear market just like anything else. In a waning tide, all ships go down. However, they outperform consumer discretionary stocks on a relative basis.
📺 Cryptos, chips & consumer staples
📈 XLP Stock Technical Analysis
The long and short-term trends are both positive. This is looking good! Looking at the yearly performance, XLP did better than 76% of all other stocks. We also observe that the gains produced by XLP over the past year are nicely spread over this period. XLP is currently trading near its 52 week high, which is a good sign. The S&P500 Index is trading in the upper part of its 52-week range, but not near new highs, so XLP is leading the market.
There is support at 72.51 from a trend line in the weekly time frame. There is also a support zone ranging from 70.57 to 71.18. This zone is formed by a combination of multiple trend lines in the daily time frame.
There is a resistance zone ranging from 77.12 to 77.62. This zone is formed by a combination of multiple trend lines and important moving averages in multiple time frames.
Besides having an excellent technical rating, XLP also presents a decent setup pattern. We see reduced volatility while prices have been consolidating in the most recent period. A pullback is taking place, which may present a nice opportunity for an entry. We notice that large players volume is rising rapidly which suggests large players have showed an interest for XLP in the last couple of days.
