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Could Utility Stocks' Weakness Persist?

PART:
1 2 3 4
Part 2
Could Utility Stocks' Weakness Persist? PART 2 OF 4

XLU: Utilities’ Indicators, Short Interest, and More

Chart indicators

US utility stocks (VPU) might continue to fall. The Utilities Select Sector SDPR ETF (XLU), which represents S&P 500 utilities, is trading at a 2% discount and a 2% premium to its 50-day and 200-day moving averages, respectively. XLU trading below its 50-day simple moving average suggests weakness. Its 200-day moving average, that is $51.96, might act as a support in the short term. If it breaks below this level, XLU might see bearishness.

XLU’s RSI (relative strength index) score currently looks stable, at ~35. Technical analysts believe that if a stock’s RSI value is below 30, it is approaching “oversold,” whereas a value beyond 70 suggests it is “overbought.”

XLU: Utilities&#8217; Indicators, Short Interest, and More

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Top utilities

Utility giants NextEra Energy (NEE), Duke Energy (DUK), and Southern (SO) seem stable, with their stocks trading at a discount to their 50-day moving averages and at a fair premium to their 200-day moving averages. Analyzing these utility stocks’ chart indicators is quite important, as they make up more than 25% of XLU.

Short interest

According to a recent report, short interest in the Utilities Select Sector SPDR ETF (XLU) fell 2% on September 15, 2017. On August 31, XLU had 48.5 million total shorted shares, and on September 15, 2017, it had 47.4 million. The lower short interest might indicate that fewer investors expect XLU to fall.

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