One way we look for compelling stocks is to start out by finding the sector that is the most oversold. After that we find which stocks in that sector are the most oversold and see which of those have the best money flows. This gives us a good starting point in identifying possible investment opportunities.
Currently the Consumer Staples sector is trading further below its 50-day moving average than it has since the start of 2006.
Below we highlight the 8 stocks in the Consumer Staples sector that are trading the furthest below their respective 50-day moving averages. We also include each stock's money flow line so we can quickly identify possible buying opportunities. As shown, the only stock of the 8 whose money flows are strong and where positive divergence between money flows and stock price has taken place is Clorox (NYSE:CLX).
Remember, this is the beginning of the research process and not the end. Everyone should have more processes and strategies to filter through before making a final investment decision.
(blue line = 50-day spread and dark red line = money flows)