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XLU: A Look at Utilities’ Chart Indicators

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Moving averages

The Utilities Select Sector SPDR ETF (XLU) continues to make new highs and still look strong. It’s currently trading 3.0% and 8.0% above its 50-day and 200-day moving averages, respectively. The strength in XLU is highlighted by the fair premium to both of these moving average. It might see support at its 50-day moving average, which is about $53.56. XLU is currently trading at $55.36.

XLU could continue to trade strongly until it crosses below both of these moving average levels.

XLU dma

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Relative strength index

The Utilities Select Sector SPDR ETF (XLU) has an RSI (relative strength index) near 68, approaching the overbought zone.

According to technical analysts, RSI is a momentum oscillator that takes values from zero to 100. RSI values below 30 are considered stocks that are trading in the oversold zone, while values above 70 are considered to be trading in the overbought zone. RSI values indicate an imminent reversal in the stock’s direction.

Top utility stocks NextEra Energy (NEE), Duke Energy (DUK), and Southern Company (SO) are trading at a fair premium to their simple moving average levels, which could maintain strength in XLU. These three stocks collectively form 25.0% of XLU.

There could be some weakness in Southern Company and Duke Energy, given their RSI levels. On September 8, 2017, Southern Company’s RSI was 86, which is deep in the overbought zone. Duke Energy’s RSI is 67, approaching the overbought zone.

Let’s move on and see utilities’ current valuations.

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