Why the recovery in Consumer Staples looks promising
Key points
- Consumer Staples stocks have enjoyed a quick thrust in mid-term breadth
- The Corporate Insider Buy/Sell Ratio for XLP recently soared to 0.12, indicating heavy insider buying.
- Each of those factors has typically led to solid medium- to long-term gains for Staples
Mid-term thrust in Staples
Defensive stocks earn their name by serving as semi-safe havens during periods of economic distress. Regardless of the broader macroeconomic environment, consumers still need to power their homes, attend to basic healthcare, and purchase groceries. Consequently, sectors like utilities, health care, and consumer staples frequently provide a structural buffer against losses during extended market downturns.
This month, the short-term trend in Staples underwent a massive and sudden shift. In just over half a month, the proportion of stocks in the sector trading above their 50-day moving average spiked from under 10% to more than two-thirds (over 67%).

The chart
