One of the big stories so far in 2012 is the way investors have abandoned many of the high-yielding, traditionally consumer defensive stocks that outperformed during the uncertain markets of 2011.
There are a number of ways to see this weakness. For our purposes, however, the fact that the highest rated exchange-traded fund (ETF) in our database heading into trading on Monday is the First Trust Morningstar Dividend Leaders Index Fund ETF (FDL) is testament enough. FDL is based on the Morningstar Dividend Leaders Index of high-yielding stocks with a track record of both growing and sustaining their dividends over time. Some of the biggest holdings in FDL include AT&T (T), Johnson & Johnson (JNJ) and ConocoPhillips (COP).
As of Friday's close, however, some of the more interesting dividend leaders are the ones that have begun to pull back in bull-market territory. Looking at the FDL, the chances are good that traders and active investors will be able to find individual stocks that are comparable to the sector's ETF.
Among the ETF's top holdings is Verizon Communications (VZ). Shares of VZ have sold off for eight days in a row, finishing in oversold territory for the last consecutive five days.
Other stocks from this group that traders may want to keep an eye on include Abbott Laboratories (ABT), which bounced modestly on Friday after dropping for three out of four days, and Bristol-Myers Squibb (BMY). Shares of BMY have pulled back for six out of the past seven sessions.
One more note on FDL: Shares of FDL have closed lower for three out of the last four sessions, finishing at new, short-term lows for the second time in a week.
Want more stocks? Read our latest from 7 Stocks You Need to Know: Marvell Makes Good: Nearly 9% in Less Than a Week.
David Penn is Editor in Chief of TradingMarkets.com
Disclaimer: The views represented in this column are those of the individual authors only, and do not necessarily represent the views of Schaeffer's Investment Research.
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