Comfort Food For the Fiscal Cliff
- Posted by Greg Harmon
- on December 3rd, 2012
We have now gone through nearly a month of scaremongering on the Fiscal Cliff. Internet, Newspapers, television, radio, you cannot get away from it. About the only place it has not invaded in my world is Instagram. I think everyone that is going to get scared has already done so. With that in mind it is time to fix the issue and provide some comfort. What better way than some comfort food. How about some tomato soup with goldfish crackers floating in it. Or maybe some beans? Seriously. Campbell Soup, $CPB, and HJ Heinz, $HNZ, not only offer these comforts, but also a fat dividend to go with them, yielding over 3%. And it gets better.
Campbell Soup, $CPB
Campbell Soup, $CPB, sets up technically with rising support in a consolidation pattern after a move higher from a base between 34.20 and 35.50. The Relative Strength Index (RSI) is in bullish territory and support more upside as it bumps along under 37. At 13 year highs, a move over 37 carries a target of 38, to interest the short term trader. But the 3-box Reversal Point and Figure chart (PnF) makes it attractive for the long term investor as well with a price objective of at least 54.00.
HJ Heinz, $HNZ
HJ Heinz, $HNZ, is another great set up technically. Trading at all time highs it is consolidating in a tight range between 57 and 58.50 with a bullish RSI and a Moving Average Convergence Divergence indicator (MACD) that is back to positive to support a push to the top. A move over the top carries a target of 60 for the short term trader and the longer term investor can look to the PnF price objective of 74 beyond that.
Disclosure: I have a long stock position in Campbell Soup and a bullish Risk Reversal in HJ Heinz.
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Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
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