uploads///XLU dma

XLU: What to Expect from US Utility Stocks


Dec. 5 2017, Updated 9:11 a.m. ET

Moving averages

US utility stocks continue to look strong considering their key moving average levels. On December 1, 2017, the Utilities Select Sector SPDR ETF (XLU) was trading 3% and 6% above its 50-day and 200-day moving average levels, respectively. XLU’s 50-day moving average level of ~$54.90 will likely act as a support for XLU going forward. Currently, it’s trading at $56.41.

Article continues below advertisement

Relative strength index

XLU’s RSI (relative strength index) is at 62.

RSI values below 30 are said to be trading in the “oversold” zone, while values beyond 70 are said to be in the “overbought” zone. Technical analysts consider RSI values at extremes to be a signal of a reversal in the stock’s direction.

Large-cap utility stocks like NextEra Energy (NEE), Dominion Energy (D), Duke Energy (DUK), and Southern Company (SO) all are trading at a noticeable premium to their respective key moving averages. Their RSI levels also look steady. It should be noted that these top stocks form 33% of the Utilities Select Sector SPDR ETF (XLU).

Short interest

According to a recent report, the short interest in the Utilities Select Sector SPDR ETF (XLU) fell marginally on November 15, 2017. The total shorted shares in XLU were 42 million on October 31, while they fell to 41.82 million on November 15, 2017.

The fall in the short interest might imply that fewer investors expect the ETF to fall soon from the current levels.

Short interest signifies the shares that are sold short and not covered yet. It commonly tracks investors’ anxiety.


More From Market Realist

    • CONNECT with Market Realist
    • Link to Facebook
    • Link to Twitter
    • Link to Instagram
    • Link to Email Subscribe
    Market Realist Logo
    Do Not Sell My Personal Information

    © Copyright 2021 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.