Pullback in consumer discretionary stocks is a buying opportunity

According to analysts at Fairlead Strategies,10 yuan futures app the recent pullback in consumer discretionary stocks presents a buying opportunity. The sector, represented by the Consumer Discretionary Select Sector SPDR Fund (XLY), is currently range-bound within its cyclical bull trend.

The firm believes a bounce is underway and is likely to extend in the near term, supported by a counter-trend rally in Tesla (NASDAQ:). Minor resistance is noted near $180, with more significant resistance around $185 from the March high. Key support for XLY is around $170.

Despite recent downside momentum relative to the S&P 500 (SPX), Fairlead Strategies suggests using the pullback to add exposure to consumer discretionary stocks emerging from corrective phases.

Notable picks include Carnival Corporation (NYSE:), Ross Stores (NASDAQ:), and Constellation Brands (NYSE:). The analysts advise holding existing positions in strong uptrend stocks such as Colgate-Palmolive (NYSE:), Chipotle Mexican Grill (CMG), Costco (NASDAQ:), Deckers Outdoor (), Garmin (NYSE:), (NYSE:), TJX Companies (NYSE:), Tractor Supply (NASDAQ:), and Walmart (NYSE:) while waiting for potential dips to add new exposure.

For stocks showing long-term turnarounds or counter-trend upmoves like eBay (NASDAQ:), General Motors (NYSE:), Kimberly-Clark (NYSE:), (NYSE:), and TSLA, analysts recommend maintaining positions but managing risks with stop-loss strategies.

They also suggest watching for oversold upturns in names near support, such as Airbnb (ABNB), (NYSE:), Lowe's (NYSE:), Marriott (MAR), and Target (TGT).

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