They're far from glamorous, but that doesn't prevent them from being attractive. When the market was sinking in the first half of the year, this sector was a safe haven - the consumer staple stocks have managed to hold their ground. That relative strength, paired with a couple of recent bullish chart patterns, is now putting these stocks near the top of our buy list.

For our chart, we'll be using the AMEX Select Consumer Staples SPDR Index (IXR), although almost all of the consumer goods indices look the same. The basic attraction here is two-fold. First, two times this year the index found support near its 200 day line. The second bounce off the 200 day average (green) just occurred a few days ago, and resulted in a move back above all the key moving averages. The other compelling chart feature is in what the index has not done. There's clear resistance at 236. That's where the chart topped out in May, and again last week. How is that enticing? It means there are still plenty of potential gains in front of this chart, whereas other sectors appear to be nearing the end of their uptrend. In fact, the weakness in other sectors is what we expect to fuel growth here. As investors rotate out of technology and other more aggressive sectors, they're apt to seek out these more stable stocks. That should be enough to push this chart past 236, and even past this year's high of 237.48. A close at 238 will be the official 'all clear' signal, so a little patience will be needed for this particular setup.

AMEX Select Consumer Staples SPDR Index (IXR) - Daily

Our projected target on this run, once (if) resistance at 237 is broken, would be 261.8. That's only about a 10% move, but for this sector, that's actually pretty sizable. Stops on this bullish outlook would come with a close under the 20 day average. It's currently at 232.78, but would need to be adjusted higher as each day progresses.

Is it a bit presumptuous to plan on a sector rotation that really hasn't taken shape yet? Yes and no. To a certain degree, we've already seen hints of it. Over the last two weeks, the most defensive sectors have seen the biggest gains. These include (in order of size of gains) energy, materials, healthcare, and then staples. Conversely, the laggards over the last two weeks (in order of weakest to strongest) have been technology, financials, discretionary, and industrials. That rotation has been very subtle, though, and doesn't really show up on charts yet.  

There are some exchange-traded funds for this sector. The S&P Select Consumer Staples fund (XLP) is the most liquid, while Merrill Lynch has a very illiquid version (symbol: CSM). Some of the common stock names associated with this sector are Procter & Gamble (PG), Altria (MO), Gillette (G), and Wal-Mart (WMT).

Price Headley is the founder and chief analyst of BigTrends.com.