No one can predict how tariffs will play out or how severe their effects will be on everything from consumer goods to the broader economy. But investors have gotten a taste of the market chaos such uncertainties can bring.
Investor fatigue is setting in, brought on by the gnawing sense of indecision due to extreme market unpredictability. The question on investors’ minds now is, “Which stocks can withstand—or even thrive in—this erratic environment?”
Three stocks you might consider are Sprouts Farmers Market Inc (SFM), Clorox Co (CLX), and Duke Energy Corp (DUK). Here’s why:
- SFM. With a strong focus on local sourcing, Sprouts is less exposed to rising import costs, giving it a potential edge over competitors. As tariffs drive up prices on imported goods, consumers may shift toward domestically-grown produce, benefiting Sprouts’ sales and margins.
- CLX. Clorox is well-positioned to weather economic uncertainty due to its strong pricing power, allowing it to maintain profitability by passing costs onto consumers—an advantage the company has been able to maintain throughout its long history.
- DUK. Duke Energy has garnered the attention of many analysts recently. With steady cash flow, a strong dividend history, and recent analyst upgrades, it’s a stock to consider.
While these fundamental factors make them compelling investment candidates, let’s examine their technical positioning, starting with a daily chart of SFM, using the ZigZag line to emphasize the swing highs and lows that define the trend.
FIGURE 1. DAILY CHART OF SFM. The stock is at a juncture. Will it bounce or break below key support?
SFM may be the strongest outperformer among the three stocks mentioned, but right now it’s at a juncture, attempting to stay above the two support levels at $130 and, below that, $125. A break below would suggest further downside to the $103–$105 range. If SFM rallies, it needs to break above near-term resistance just above $155 before challenging its all-time high at $180 to confirm the resumption of its uptrend.
Volume-wise, the Accumulation/Distribution Line (ADL) shows money flows just hovering on the bullish side, while the Relative Strength Index (RSI) is positioned slightly above “oversold” levels, suggesting that SFM has room to run if it bounces and reverses upward.
Next, take a look at this daily chart of CLX.
FIGURE 2. DAILY CHART OF CLX. Lots of technical headwinds up above.
From September to January, CLX has been trading in a wide range with two failures to take out a two-year high at $170. However, the January drop to $144 prompted investors to think that maybe CLX is at the onset of a downtrend (lower low and lower high) if not for the March bounce from the same level.
There’s a possibility that CLX may be stuck within a lower trading range given the numerous resistance levels above the current price. For CLX to break that cycle, it would have to rise above $159, the most immediate swing high while staying above $144. If CLX closes below $144, then you may see further declines to the $135 to $140 range. For now, keep an eye on how price responds to the $144 level.
Volume-wise, accumulation seems to be slowing, according to the ADL. The RSI is above the 30-line and shows room for upside advancement, but only if CLX’s current bullish reversal can gather more bullish momentum.
Now, shift over to a daily chart of DUK.
FIGURE 3. DAILY CHART OF DUK. On the verge of an all-time high?
DUK’s near-term rally aims to test $120, potentially pushing the stock into all-time high territory if successful. Watch for sustained upward momentum or a pullback to key support.
The RSI is hovering with a slight downward tilt but remains well below the overbought threshold. Meanwhile, the ADL indicates strong accumulation, reflecting the money flows pushing the stock toward $120. Watch the volume for confirmation if the stock breaks out, and look for signs of follow-through. If the breakout fails and the stock pulls back, a bounce off key support levels could present a favorable entry point.
At the Close
SFM, CLX, and DUK each offer distinct strategies for mitigating tariff risks. There are others as well. If any of these stocks interest you, add them to your ChartLists and use the tools suggested above, or any others available on StockCharts that might better suit your approach, to fine-tune your entry. The current tariff unpredictability can change the environment quickly, so pay attention to what’s going on in the news in case you need to modify or fine-tune your strategy.
Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.