This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Book Profits in Overvalued Consumer Staples

Wal-Mart ($74.55) traded to a new all-time high of $75.24 on July 30. My monthly value level is $71.04 with a weekly risky level at $76.41. WMT reports quarterly results pre-market on August 16, and current earnings expectations are for $1.17 a share.

Altria ($35.92) traded to a new all-time high of $36.29 on August 1. My semiannual value level is $28.53 with a monthly pivot at $35.73 and quarterly and annual risky levels at $37.18 and $37.98.

Reynolds American ($46.61) traded to a new all-time high of $46.93 last Friday, Aug. 3. My monthly value level is $43.50 with a weekly risky level at $48.28.

Whole Foods Market ($94.60) traded to an all-time high of $97.25 on June 26. The stock fell to $81.55 into July 23 and traded as high as $95.98 Friday, giving investors a second chance to sell strength. My weekly and monthly risky levels are $100.09 and $100.37.

Monster Beverage ($66.78) traded to an all-time high of $83.96 on April 30. The stock fell to $61.72 into July 23, and last Friday's high was $66.96. My semiannual value level is $58.04 with a weekly pivot at $65.52 and quarterly risky level at $72.49. MNST reports quarterly results after the close on Aug. 8, and earnings are expected to be 62 cents a share.

Constellation Brands ($29.92) is trading up towards an all-time high of $31.60 set in June 2005. My monthly and annual value levels are $27.50 and $27.35 with a quarterly pivot at $28.23 and annual and weekly risky levels at $31.07 and $32.23.

To summarize, the XLP has had strong upward momentum that has led the index to become overvalued fundamentally and overbought technically. Given weak consumer confidence and flat personal spending, it is time to book profits in this sector.

At the time of publication, the author did not own any of the stocks in the table shown and held no positions in XLP.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
Richard Suttmeier has an engineering degree from Georgia Tech and a master of science from Brooklyn Poly. He began his career in the financial services industry in 1972 trading U.S. Treasury securities in the primary dealer community. In 1981 he formed the Government Bond Department at LF Rothschild and helped establish that firm as a primary dealer in 1986. Richard began writing market research in 1984 and held positions as market strategist at firms such as Smith Barney, William R Hough, Joseph Stevens, and Rightside Advisors. He joined in 2008 producing newsletters covering the U.S. capital markets, and a universe of more than 7,000 stocks. Richard employs a "buy and trade" investment strategy and can be reached at
3 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
XLP $52.97 0.13%
MO $63.35 0.36%
KO $44.91 -0.16%
PG $81.46 0.61%
WMT $67.26 -0.49%


Chart of I:DJI
DOW 17,780.25 -110.91 -0.62%
S&P 500 2,065.22 -16.21 -0.78%
NASDAQ 4,778.7780 -38.8160 -0.81%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs