In times of economic optimism or a bullish market sentiment (“Risk On”), investors tend to favor high beta stocks, which often results in higher prices for these securities. On the other hand, when economic uncertainty or bearish sentiment prevails (“Risk Off), investors typically move away from these stocks, seeking the safety of more stable low beta investments.
In the chart below, we analyze a few relative comparisons: (1) High Beta (Risk On) vs. Low Volatility (Risk Off) and Consumer Discretionary (Risk On) vs. Consumer Staples (Risk Off).
Additionally, we include (2) classic risk-on asset classes such as Semiconductors and Bitcoin. This analysis reveals that the broader markets are becoming more defensive, with risk sentiment decreasing from late January to the present (Note: NVDA earnings have yet to be announced as of this writing).
During times of economic uncertainty, as the saying goes, “money goes to where it’s best treated,” and one of those favored areas is Consumer Staples, a classic defensive sector. By utilizing our proprietary “trend/trading” Market Rover (MR) software algorithm, we observe that the Consumer Staples sector (XLP) has recently turned green, indicating an uptrend.
With a quick Market Rover search, we can identify a classic defensive company, Molson Coors Brewing Company (TAP), which has recently turned green, indicating a new uptrend AND a buy signal idea, presenting a “Trade” idea within this new trend:
With continued momentum and money flowing into the Consumer Defensive (XLP) sector, the Market Rover has identified potential short-term “Trade” target prices for Molson Coors Brewing Company (TAP):
- Target 1 (TP1) of approximately $62.17
- Target 2 (TP2) of approximately $63.37
To learn more about finding trends and trades using our exclusive Market Rover (MR) trend/trading proprietary software tool…
Happy Trading!
