The consumer discretionary sector is home to some of the most well-known brands on the market. Companies in this sector make the goods and services that people spend money on when the economy is strong, like restaurant food, fashion, and travel.
Its counterpart is the consumer staples sector. Companies in this sector make the goods and services that are more resistant to economic downturns, like household goods, food and beverages, and personal care products.
Consumer discretionary stocks include all of the following, and more:
Since these stocks tend to rise and fall with the overall economy, they’re also called ‘cyclical stocks.’ The COVID-19 was harder on this sector than on most other sectors — and as the economy opened up again, the consumer discretionary sector benefited the most from the pent-up demand. As interest rates tick up, this sector is again facing challenges.
Consumer discretionary is home to its share of hot sectors — the at-home sector is a recent example. Stocks in this sector are some of the most well-known in the market. Their deep cash reserves make it possible for them to weather economic turmoil and pivot to new sectors when the moment calls for it.
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The Best Consumer Discretionary Stocks in November 2024 — Sector Leaders
Let’s unpack what the ‘best consumer discretionary stocks’ should mean to you. I definitely don’t mean that they’re the best stocks to invest in.
I don’t think that any stocks are ‘safe.’ What I look for is volatility, and the best consumer discretionary stocks have plenty of it!
Your job as a trader is to profit from volatility, do NOT fall in love with any trade or asset as a trade is not profitable until you lock in your profits & getting emotional can muddy the waters. Similarly, it's difficult to cut losses fast if you become too emotionally involved
— Timothy Sykes (@timothysykes) December 7, 2021
When you’re learning about a sector, pay attention to the sector leaders. Their charts can tell you a lot about the health of the sector.
When they’re running, their momentum can affect their entire sector and create the sympathy plays I like to trade!
While we’re focusing on consumer discretionary stocks here, it’s important to remember that the stock market is a vast and diverse place. There are many different types of stocks, each with their own unique characteristics and potential for profit. To truly excel as a trader, you need to understand the full breadth of opportunities available to you. So, why not take a moment to explore the different types of stocks and expand your trading horizons?
Tesla Inc. [NASDAQ: TSLA]
Founded in 2003 and based in Palo Alto, California, Tesla is a vertically integrated sustainable energy company that also aims to transition the world to electric mobility by making electric vehicles. The company sells solar panels and solar roofs for energy generation plus batteries for stationary storage for residential and commercial properties including utilities. Tesla has multiple vehicles in its fleet, which include luxury and midsize sedans and crossover SUVs. The company also plans to begin selling more affordable sedans and small SUVs, a light truck, a semi truck, and a sports car. Global deliveries in 2022 were a little over 1.3 million vehicles.
Nike Inc. [NYSE: NKE]
Nike is the largest athletic footwear and apparel brand in the world. It designs, develops, and markets athletic apparel, footwear, equipment, and accessories in six major categories: running, basketball, football (soccer), training, sportswear, and Jordan. Footwear generates about two thirds of its sales. Nike’s brands include Nike, Jordan, and Converse (casual footwear). Nike sells products worldwide and outsources its production to more than 300 factories in more than 30 countries. Nike was founded in 1964 and is based in Beaverton, Oregon.
Netflix Inc. [NASDAQ: NFLX]
Netflix’s primary business is a streaming video on demand service now available in almost every country worldwide except China. The firm primarily generates revenue from subscriptions to its eponymous service. Netflix delivers original and third-party digital video content to PCs, internet- connected TVs, and consumer electronic devices, including tablets, video game consoles, Apple TV, Roku, and Chromecast. Netflix is the largest SVOD platform in the world with over 220 million subscribers globally.
The Best Consumer Discretionary Penny Stocks in November 2024
The best consumer discretionary penny stocks are constantly changing. Most of these companies won’t become the next Apple. I’m keeping them on watch to see if they match my preferred setups.
Penny stocks can be a great way to potentially make substantial profits, especially when you’re dealing with consumer discretionary stocks. However, it’s also important to diversify your portfolio and consider other types of stocks as well. If you’re looking for some inspiration, check out my guide on how to invest in 10 top stocks. It’s a great resource for any trader looking to broaden their investment strategy.
NOTE: I have NO intention of trading these stocks unless they suit my favorite setups. This is only a watchlist.
To find the best consumer discretionary penny stocks requires a top-level stock screener. I use the one in StocksToTrade — I helped design it, so it has all the tools and customizations I look for to create my stock watchlists.
Try StocksToTrade for 14 days and see how it helps your watchlist skills — only $7!
These are the penny stocks I’m watching in November 2024:
Lucid Group Inc. [NASDAQ: LCID]
Lucid Group Inc is a technology and automotive company. It develops the next generation of electric vehicle (EV) technologies. It is a vertically integrated company that designs, engineers, and builds electric vehicles, EV powertrains, and battery systems in-house using our own equipment and factory.
ChargePoint Holdings Inc. [NYSE: CHPT]
ChargePoint designs, develops, and markets networked electric vehicle charging system infrastructure and cloud-based services that enable consumers to locate, reserve, and authenticate EV charging. The company’s hardware product lineup includes solutions across home, commercial, and fast-charging applications. ChargePoint derives the majority of its revenue from the United States.
WW International Inc. [NASDAQ: WW]
WW International (Weight Watchers rebranded) is one of the largest global providers of weight loss solutions, generating $1.2 billion in 2021 revenues (good for low-single-digit percentage market share, by most estimates). The firm has expanded its purview beyond its historical dietary focus, now offering an integrated wellness solution that extends into sleep tracking, fitness, mental health, and nutrition services through its mobile application ecosystem.
How To Trade Consumer Discretionary Stocks
Learning how to trade consumer discretionary stocks starts with your education. You need to learn what penny stocks are, how they work, and how to identify their patterns.
My FREE penny stock trading guide is a good start.
From there, if you want to take it to the next level, consider joining my Trading Challenge.
Once you’re ready to start trading, you need a few key things…
Choose the Right Broker
To trade stocks, you need a brokerage account. Your broker is the gateway between you and trades. Choose a good one … Do your research and check out this guide for more tips.
Check out this quick startup guide to choosing a broker:
Get a Powerful Stock Platform
A stock screener can help you narrow down the many stocks available to trade. I use StocksToTrade, which can also help with the next item…
Build Your Watchlist
Before every trade, you need to perform a detailed stock analysis.
There are two key types of stock analysis: fundamental analysis and technical analysis.
See how I build my watchlists every Sunday by signing up to my NO-COST weekly watchlist!
StocksToTrade can help you do both: it has awesome charting software and links to stock news, SEC filings, and even social media mentions.
With day trading penny stocks, technical analysis — reading the charts — matters more. Chart patterns show me how a stock’s performed over weeks, months, or even years. That helps me on the next step…
Follow Your Trading Plan
A trading plan is where you plot out entry and exit points, risk, and profit goals. Ideally, you base the plan on careful research and stick to it.
Trading consumer discretionary stocks, like any other type of stock, requires a solid strategy. It’s not enough to simply identify potential opportunities; you also need to know when to enter and exit trades, how to manage your risk, and how to stay disciplined when the market is volatile. If you’re new to trading or just looking to refine your approach, I highly recommend checking out my guide on day trading strategy. It’s packed with valuable insights that can help you trade more effectively.
Track Every Trade
You need to keep a METICULOUS trading journal. This is where the science of trading comes in.
How do you know what strategies work for you, and which don’t? You look at your trading journal.
How do you know when you’ve been overtrading and need a timeout? You look at your trading journal.
If you’re not careful, your emotions can determine your trading approach. Before long, you’ll be wearing the same socks that you were wearing on your “big day.” That isn’t trading anymore — that’s gambling.
Rinse and Repeat
Real trading is a job. It isn’t a boring, 9-5 job, but it’s still something that rewards consistency and discipline.
Follow these rules throughout your trading career. That will separate you from the constant flow of newbies trying to get rich quick, and protect you from the scammers trying to sell trading shortcuts.