There has been some rotation into more defensive stocks this week, so I thought I would highlight Saputo this week. The chart looks set to deliver more solid gains. Saputo has a big uptrend going, but recently pulled back for about 6 weeks. When investors jumped into Financials in November, they were selling Saputo by looking at the chart. Friday price action is interesting. It gapped open, shot up, then traded near the lows to close out the week. All of the other indicators are giving positive signals. The MACD is turning up, the SCTR is pushing back above 75, the volume doubled on the breakout, and the relative strength downtrend apeears to be breaking.
I would like Saputo better if it would have closed the day near the highs, so this would go on the watch list to make sure the breakout holds. If the market is rotating into defensive stocks, this could be a good choice in the Consumer Staples area.
Greg Schnell, CMT, MFTA.