Since Oct. 1, bulls have been out of luck when it comes to the stock markets. Bears have run wild, as threats for rising rates and Chinese tariffs continue to hurt stock prices. It’s left most stock charts in shambles, as bulls dump stocks and wait on the sidelines for the dust to settle.
So far, we’ve been lacking some of the big, panicky selling days. As brutal as it is to sit through those, investors know it’s what’s needed for there to be some capitulation.
Another observation? There are still some stocks that are working in this environment, believe it or not. While some have been atypical leaders, many of the stocks that have been doing well are high-yield, consumer packaged-goods stocks. In other words, recession stocks.
Does that mean we’re heading for the dreaded recession? I don’t know. But I do know when stock charts look bullish and when they look bearish. So let’s have a look at the stock charts that are still winning.
Procter & Gamble (PG)Procter & Gamble (NYSE:PG) has been on fire, but it’s not just since the market correction got under way. This name has been chugging higher since the beginning of May, when it dropped down to $70.
Even though it’s off its highs, shares are still up about $22 apiece since then, good for a 31% gain. Some investors may think of ringing the register on such a move. I can’t blame them, particularly during a time like this. But what I will say is, I would be hesitant to sell a winner like this if investors are going to hang onto other losers too.
For those that do decide to sell, there will be a bevy of buyers, particularly as PG still pays out a 3.1% dividend yield. It helps that its payout continues to rise as well. I would love a pullback to uptrend support, particularly if it comes at or near $90, another support level. Below that on the stock chart and the 50-day should keep PG afloat.
Another big winner has been Starbucks (NASDAQ:SBUX). However, unlike PG, Starbucks hasn’t been winning for quite as long.
In mid-June, the company announced a deal with Nestle that would result in Starbucks receiving a ton of cash and simplifying its operations. This would lead to a much larger and accelerated buyback, another 20% boost to the dividend (after receiving one in November 2017) and improving margins down the stretch.
But the market didn’t care, beating the stock down to multiyear lows near $47. That’s because Starbucks also pre-announced some disappointing metrics for the quarter.
Since then, though, the stock has been on fire. SBUX stock is up more than 42% during that stretch and since trouble began in October, has done even better. From its July lows to the beginning of October, shares were up 17%. From Oct. 1 until Nov. 21, SBUX is up almost 22%.
This stock is still up big and there’s no telling if it will pull back into the mid or low $60s. But keep an eye on the stock charts to see if Starbucks can keep pushing higher.
Realty Income (O)
Investors are looking for safety. Sometimes they find that in low valuations, other times in strong balance sheets. In the case of Realty Income (NYSE:O), finding a blue-chip REIT with a 4%-plus yield is suiting many investors just fine.
While Realty suffered earlier this year, shares have been storming higher on the stock chart since its February lows.
With an RSI near 70 and shares approaching their highest level in two years, I do worry about the stock topping out at this point. That’s why I’d love a dip back into the low $60s. Anything into that $58 to $60 zone would be attractive too.
If that pullback comes to fruition, investors will get a chance to buy a hot stock that’s cooled off a bit, and its yield will be better.
Even though there are fears of an economic slowdown right now, investors know that Realty’s business is well-diversified and should continue to hold up amid the slowdown. Its recent earnings beat is encouraging too. Plus, yield hunters want something that’s dependable, and it hardly gets better than the “Monthly Dividend Company.”
Giving Realty a run for its money is Ventas (NYSE:VTR). This healthcare REIT has been incredibly consistent, is very well run and trades at a reasonable valuation. It’s no wonder VTR has been getting some love lately.
Like Realty, investors are seeking out the best stocks with consistent payouts. Ventas may not have raised its dividend in 2009, but it maintained its payout from 2008 and continued to raise its annual dividend each year after that. If VTR’s business and payout held up through the Great Recession, it will make it through any speed bumps 2019 and 2020 may have to throw at investors.
Even after its big rally, shares of VTR still yield roughly 5.1%. That’s pretty impressive for a stock that has rallied almost 20% from early October, particularly at a time where major U.S. stock indices are down double-digit percentages during the same period. Its yield is a big reason why Ventas is a buy-on-dips stock and not a sell-on-rips stock.
Like Realty, I would love a dip down into this $59 to $60 area. It will show just how strong the buy-on-dips crowd is while simultaneously working off some of that short-term overbought condition. Below uptrend support, VTR will likely find buyers between the 50-day and 100-day moving averages.
Of all the names on this list, most investors probably didn’t expect to see Tesla (NASDAQ:TSLA). But lo and behold, this name has been an absolute stud from its October lows.
We’re $100 a share off the bottom, good for a 40% rally over the last month, as TSLA now consolidates in a tight range. Earlier this week, Tesla tried to break out over the $360 level. So far though, resistance has held strong.
The question now is, what gives way first, support or resistance? Should Tesla lose channel support and the $330 level, look to see if it retests the $310 area on its stock chart. There should be plenty of support nearby if it does. Over $360 and the highs near $390 are on the table.
If Tesla maintains momentum, look to see how it trades going into earnings in 2019.
Johnson & Johnson (JNJ)Johnson & Johnson (NYSE:JNJ) has been a name I’ve championed for a long time here on InvestorPlace. The company has great management, a bank vault of a balance sheet, a tough dividend yield of 2.5% and an excellent portfolio of products.
You can add raging stock price to that list as well.
Shares are up more than 20% from the summer lows, as JNJ has continued to grind higher and higher. The one thing I’d say about JNJ though, is that the stock has been susceptible to pullbacks.
We obviously saw this in the beginning of the year, but even more recently, shares dipped from $142 to $132 in a hurry. That said, a decline into this $140 to $144 range would be attractive. I know that’s a wide range, but depending on how conservative or how aggressive investors want to be, this wide range offers a little something for everyone.
Those who don’t want to think that much about it can simply buy on a test of the 50-day moving average.
Some call it the Tesla of China, as Nio (NYSE:NIO) went public just a few months ago. As one might expect, the stock has been highly volatile since, doubling from its $6.50 IPO price before falling 50% back to its opening-day levels.
Despite being very unlike Procter & Gamble or Realty Income, Nio has found buyers over the last two months. As shares neared $6 (on two occasions), the bulls stepped in and bought the name.
Nio shares are up about 30% so far this month and the company’s Nov. 6 third-quarter earnings report has been a catalyst for much of those gains. Production of its all-electric ES8 is coming along nicely and revenue growth is accelerating at a significant pace. If Nio is smart, it learned plenty of lessons from Tesla’s mistakes over the years. Let’s hope it doesn’t repeat some of them.
I’m not saying this one is a safe play lay-up, but only pointing out that it’s trending higher while the Nasdaq bobbles near its lows.