Defensive Scan
Defensive Scan
Defensive rotation cooling sharply from Feb 16 extremes — JNJ dropped from RSI 89 to 75.6, WMT from RSI 78 to 55, CL from RSI 89 to 69.9. Mean-reversion underway. MDLZ broke below SMA20 (RSI 51.7). HRL still weak at RSI 38. No screaming buys yet — wait for RSI < 40 entries on quality names.
Quick Snapshot
| Signal | Reading |
|---|---|
| Overall | 🟡 COOLING FROM EXTREMES — Defensive RSIs declining across board, rotation unwinding |
| Most improved | WMT (RSI 78→55), CL (RSI 89→70), JNJ (RSI 89→76) — pullback in progress |
| Breakdown watch | MDLZ ($58.80, RSI 51.7, below SMA20 $59.60) — weakest large-cap defensive |
| Still oversold | HRL ($23.78, RSI 38) — chronic underperformer, fundamental headwinds persist |
Price Table (Validated 2026-02-22)
| Stock | Price | 7D Chg | 30D Chg | RSI | SMA20 | vs SMA | Status | Action |
|---|---|---|---|---|---|---|---|---|
| JNJ | $242.49 | -0.4% | +11.2% | 75.6 | $235.40 | +3.0% | 🟠 Near overbought | ⚠️ Avoid |
| KO | $79.84 | +1.5% | +10.9% | 72.0 | $76.81 | +3.9% | 🟠 Near overbought | ⚠️ Avoid |
| PG | $160.78 | +0.4% | +10.9% | 71.1 | $155.68 | +3.3% | 🟠 Near overbought | ⚠️ Avoid |
| CL | $95.09 | -1.6% | +12.2% | 69.9 | $92.17 | +3.2% | 🟡 Neutral/pullback | 🔍 Watch |
| CLX | $123.60 | -1.9% | +13.1% | 74.9 | $117.98 | +4.8% | 🟠 Near overbought | ⚠️ Avoid |
| MCD | $329.23 | +0.5% | +7.7% | 71.0 | $321.91 | +2.3% | 🟠 Near overbought | ⚠️ Avoid |
| GIS | $48.34 | +0.5% | +6.0% | 72.3 | $46.30 | +4.4% | 🟠 Near overbought | ⚠️ Avoid |
| HRL | $23.78 | -2.6% | -2.9% | 38.0 | $24.51 | -3.0% | 🟢 Oversold | 🔍 Watch |
| MDLZ | $58.80 | -6.1% | +2.5% | 51.7 | $59.60 | -1.3% | 🔴 Breakdown | ❌ Don't Buy |
| WMT | $122.99 | -8.1% | +3.0% | 55.2 | $124.93 | -1.6% | 🟡 Neutral/pullback | 🔍 Watch |
| COST | $985.27 | -3.3% | +0.4% | 63.1 | $981.96 | +0.3% | 🟡 Neutral | 🔍 Watch |
Tier Analysis
Tier 1: Still Extended (RSI 70+) — Do Not Buy
JNJ, KO, PG, CLX, MCD, GIS remain above RSI 70 despite the pullback from Feb 16 peaks. These names ran hard into safety rotation and have not corrected enough to offer value. Each is still 3-5% above SMA20. Wait for RSI to drop into the 45-55 range before considering entries.
Tier 2: Cooling But Not There Yet (RSI 55-70)
CL (RSI 69.9) — closest to breaking below 70, dropped from 89 to 70 in one week. If the rotation continues unwinding, CL could reach RSI 50-55 and present a re-entry zone near $90-92 (SMA20 support).
WMT (RSI 55.2) — biggest 7D pullback at -8.1%. Now near SMA20 ($124.93) and below it at $122.99. If this is just a breather (not a trend break), $120-122 could be an accumulate zone. Retail dominance thesis intact.
COST (RSI 63.1) — barely moved in 30 days (+0.4%), pulled back -3.3% this week. Near SMA20. Best risk/reward in the group if consumer spending holds.
Tier 3: Weak / Breakdown
MDLZ (RSI 51.7, -1.3% vs SMA20) — broken below SMA20. Only +2.5% in 30 days while the entire defensive group ripped. Relative underperformance is a red flag. Not a buy until RSI < 40 or clear catalyst.
HRL (RSI 38.0, -3.0% vs SMA20) — chronic underperformer. Negative 30D return (-2.9%) when defensives were flying. Ongoing margin pressure, turkey commodity exposure. Low conviction even at RSI 38.
Entry Zones
| Stock | Entry Zone | RSI Trigger | Conviction | Notes |
|---|---|---|---|---|
| WMT | $118-$122 | RSI < 50 | MEDIUM | Retail dominance intact, near SMA20 now |
| COST | $960-$975 | RSI < 55 | MEDIUM-HIGH | Best quality in group, 30D flat = no chase risk |
| CL | $90-$92 | RSI < 55 | MEDIUM | Needs more cooling, SMA20 at $92 is key support |
| HRL | $22-$23 | RSI < 32 | LOW | Only if RSI breaks further down + catalyst |
| MDLZ | $55-$57 | RSI < 40 | LOW | Below SMA, avoid until trend reversal |
Action Matrix
| Action | Stocks | Why |
|---|---|---|
| ⚠️ AVOID | JNJ, KO, PG, CLX, MCD, GIS | RSI 70-75, still extended, 3-5% above SMA20 |
| 🔍 WATCH | WMT, COST, CL | Cooling from extremes, approaching entry zones |
| ❌ DON'T BUY | MDLZ | Broke below SMA20, relative weakness vs peers |
| 🔍 WATCH (LOW CONV.) | HRL | RSI 38 but fundamental headwinds, no catalyst |
vs Feb 16 Scan (What Changed)
| Stock | RSI Feb 16 | RSI Feb 22 | Delta | Signal Change |
|---|---|---|---|---|
| JNJ | 89 | 75.6 | -13.4 | 🔴→🟠 Still extended but cooling |
| CL | 89 | 69.9 | -19.1 | 🔴→🟡 Biggest drop, watch for entry |
| CLX | 80 | 74.9 | -5.1 | 🔴→🟠 Still overbought |
| WMT | 78 | 55.2 | -22.8 | 🔴→🟡 Largest correction, approaching neutral |
| MDLZ | 74 | 51.7 | -22.3 | 🟡→🔴 Broke below SMA — now weakest |
| HRL | 38 | 38.0 | 0.0 | 🟢 No change — persistently weak |
Key Discoveries
| Discovery | Implication |
|---|---|
| WMT dropped -8.1% in 7 days (RSI 78→55) | Fastest mean-reversion in group; $120-122 becomes watch zone |
| MDLZ is the only name that broke below SMA20 | Relative weakness signals; avoid until RSI < 40 |
| Defensive rotation unwind is orderly, not a crash | Still no screaming buys — need another week of cooling |
| COST barely moved in 30D despite defensive mania | Cleanest risk/reward if you want defensive exposure |
Open Questions
Related
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