Defensive stocks can accumulate sweet profits for risk-conscious investors. Opportunities abound in 2023 as the Food-Confectionary group suddenly grabs the market's attention, with 40% of components at or near new highs this week.
The group has only five stocks, and four are acting well. Some are in bases that show clear buy points while the others are in buy zones, looking for institutional and retail interest. And solid technical ratings support this surprising group of market-leading stocks.
Chicago's Mondelez makes biscuits, chocolates, gum, candy and powdered drink products.
MDLZ shares broke out of a flat base with a 68.91 buy point, lifting to their highest level in 13 months. Volume surged on the breakout Friday, a bullish sign, while the early stage base holds great promise for stock gains. The stock remained in buy range Tuesday morning.
The rising relative strength line is also an encouraging sign, indicating outperformance compared to the S&P 500.
Also in Chicago, Tootsie Roll sells confectionary under several trademarks such as Tootsie Roll, Tootsie Mini Pop and Frooties.
TR shares are approaching a 46.21 buy point after finding support at the 50-day line in a flat base. The stock has gained over 45% in the last year, hitting new highs.
Denver's Simply Good Foods makes nutritious and wellness products like protein bars, shake mixes and chips.
SMPL shares are in a consolidation with a 40.26 entry. It surged in above-average volume when it found support along its 50-day line on Friday.
Top Defensive Stocks: Hershey Sweeter Than Ever
One of the top defensive stocks, Hershey makes chocolate and non-chocolate confectionaries, mint and gum, and salty snacks. It sells to wholesale distributors, chain grocery stores and vending machine companies. The confectioner ranks first in the industry group, which holds 91st place among IBD's 197 industry groups.
HSY shares broke out of a cup-with-handle base with a 242.39 entry and are still in a buy zone.
The chocolate stock has been outperforming the S&P 500 since early February and just reiterated its 2023 outlook last week.
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