Consumer finally waking up. Buy these stocks

A Tommy Hilfiger store in New York
Ramin Talaie | Bloomberg | Getty Images
A Tommy Hilfiger store in New York

After trading sideways for nearly four months, consumer discretionary stocks are finally breaking out, boosted by higher consumer confidence and lower oil prices.

"Oil prices are providing a significant boost to consumer confidence," wrote Atul Lele, chief investment strategist at Bahamas-based Deltec International Group, which manages $4.5 billion is assets.

He believes the 40 percent drop in oil prices in the past year will lead to a 1 to 2 percent increase in real incomes. Based on his estimates, it takes six to nine months to see the effects of those savings.

Similarly, consumer sentiment is back on the rise, climbing nearly 4 points to 94.6 last week, approaching its best reading of the economic recovery that began in 2008, according to Nasdaq OMX Group.