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3 Consumer Goods Stocks Looking Bad

Protective puts may be a good strategy for these true-blue names


As I was using my Power Stocks scanning program to take a look at the market, three bearish consumer goods stocks caught my attention. It’s no surprise—consumer goods stocks are backtracking on the unexpected gains they saw earlier this year.

I wouldn’t necessarily recommend dumping these stocks—they’re all on the Dividend Aristocrats list, so they may well play an important role in your overall portfolio. But if you want some insurance to the downside, these names are currently showing all of the qualities I look for in a put option—the potential for a big move to the downside (volatility) based on technicals and past activity in the stock, and good liquidity.

I’ll leave it up to you to decide which strike price and month are appropriate for your trading style, but be sure to give yourself enough time to be right. I’ve also included the support and volatility levels my scanner has detected for these stocks. An average volatility is considered to be 20.

  • Proctor & Gamble (PG) is trading just about a dollar below its $79 resistance, with a $78.07 closing price on Monday. It shows a fairly tame volatility level of 15, as you’d expect for a true-blue dividend stock.
  • Colgate-Palmolive (CL) has also started its descent, currently $2 below its $60 resistance level. It also has low volatility, rated 15.
  • Clorox (CLX) has the lowest volatility of the group, with a rating of 12 from my quantitative system. Yet it’s the farthest from its resistance level of $87, currently at $84.57.

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