Even in hard times, consumers buy a trolley-load of groceries and cleaning products every week. This means that supermarkets enjoy more predictable sales than purveyors of less essential items.

As a result, the food and drug retail sector is a popular investment choice during periods of uncertainty. But it is not a completely safe bet, having underperformed the market during four of the nine big market sell-offs since 1965. While supermarkets pride themselves on value-for-money offers, the sector isn’t priced that competitively. In spite of rising from a 20-year low, its dividend yield is still significantly below its average over that period.

So the bounce in the Food Retail sector is almost certainly corrective, rather than the beginning of a new bull run. Its performance relative to the FTSE 350 has been disappointing since December and could persist.

A break below the 200- week exponential moving average (EMA: 4325 today) would add to the gloom. Previous breaks in 1998 and 2002 were followed by losses.

The sector’s momentum on the relative strength index has now reached relatively high levels for a bear market. Once the downtrend resumes, a re-test of the 200-week EMA is likely. My Elliott Wave interpretation suggests the sell-off could ultimately take the sector to 3926 or even 3500. Traders could go short on a sharp turnround at around 4833 or 5014, placing closing stop losses behind the 144-day or daily cloud top respectively (4984 and 5064 respectively.)

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