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XLU: Analyzing Utilities’ Chart Indicators and Short Interest

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Mar. 5 2018, Updated 12:50 p.m. ET

Moving averages

The Utilities Select Sector SPDR ETF (XLU) is trading 3% below its 50-day moving average and 8% below its 200-day moving average. The fair discount to both of the key moving average levels indicates the weakness in XLU. Its 50-day moving average, which is ~$50.3, will likely act as a resistance for XLU in the short term. Currently, XLU’s trading at $48.9.

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Relative strength index

XLU is trading at an RSI (relative strength index) of 43.

RSI values above 70 are considered to be in the “overbought” zone, while values below 30 are considered to be in the “oversold” zone. An RSI score at either extreme suggests an imminent reversal in the stock’s direction.

Short interest

The short interest in XLU increased 3% as of February 15, 2018. The total shorted shares in XLU were 59.9 million as of January 31, while the number increased to 61.4 million as of February 15, 2018.

The increase in the short interest could mean that more investors expect XLU to fall from its current price. The short interest is the number of shares that are sold short and not covered yet. The short interest measures investors’ anxiety.

Among the top utility stocks, NextEra Energy (NEE), the biggest component of the S&P 500 Utilities Index (XLU), seems relatively strong. NextEra Energy is trading well above its key support level. At the same time, Duke Energy (DUK) and Dominion Energy (D) are trading lower than their respective moving average levels.

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