How Are Utilities’ Moving Averages and Short Interest Trending?



Relative strength index

The Utilities Select Sector SPDR ETF (XLU) continued its downward streak last week as well. It is currently trading in the oversold zone with its RSI (relative strength index) at 18. Its current RSI levels indicate that it might see a reversal in the near future.

Technical analysts consider a stock to be trading in the oversold zone when its RSI falls below 30, while a stock is considered to be trading in the overbought zone when a stock’s RSI goes above 70. RSI at extremes might hint at an imminent reversal in the stock.

XLU dma

NextEra Energy (NEE), Duke Energy (DUK), Dominion Energy (D), and Southern Company (SO), the first four utilities by market capitalization in the S&P 500 Utilities Index (XLU), are currently trading in the oversold zone. They collectively form ~33% of XLU.

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Moving averages

On January 12, 2018, XLU was trading 7% and 6% lower than its 50-day and 200-day moving average levels, respectively. The fair discount to both the key moving average levels continues to highlight the immense weakness in XLU. Its 200-day moving average of ~$53.6 is expected to act as a resistance for XLU in the short term. It is currently trading at $50.3.

Short interest

According to the latest data, short interest in XLU increased by a notable 9% on December 29, 2017. Total shorted shares in XLU were 45.0 million on December 15, while the number increased to 49.2 million on December 29, 2017.

Short interest represents the total number of shares that are sold short and have not yet been covered back. The metric tracks investor anxiety.


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