3 Big Consumer Stocks to Trade (or Not)

Constellation Brands

Nearest Resistance: N/A
Nearest Support: $39
Catalyst: Grupo Modelo Asset Sale

>>4 Loser Stocks Poised for a Comeback in 2013

Shareholders of Constellation Brands (STZ) are winning big today after Anheuser-Busch InBev (BUD) announced that it would sell rights for Grupo Modelo's U.S. brands to Constellation in order to jump the regulatory hurdles being imposed on BUD's full acquisition of the Latin American brewing giant. The news gives Constellation some of the country's most popular beer brands at a bargain price, a necessary sacrifice BUD had to make to get the bigger piece of the Grupo Modelo's business. The news is sending STZ to new highs today, up more than 36%.

Making new highs is significant from an investor psychology standpoint because it means that everyone who has bought shares in the last year is sitting on gains. As a result, the "back to even" mentality is less of a concern than it would be for a name with a higher proportion of shareholders sitting on losses. For late-to-the-game buyers, though, I'd recommend sitting on the sidelines until STZ pushes above today's high water mark. A correction might be in order before the weekend.

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