XLU: Where Utilities Could Go from Here

Moving averages

Currently, the Utilities Select Sector SPDR ETF (XLU) is trading at $53.5—nearly 1% and 4% above its 50-day and 200-day moving average levels, respectively. These simple moving averages showed a “golden cross” pattern early this month and continue to look strong. The levels around $52.83 and $51.33 could likely act as a support for XLU in the short term.

XLU: Where Utilities Could Go from Here

Relative strength index

Currently, XLU’s RSI (relative strength index) appears stable at 48. A stock is considered “oversold” when its RSI score falls below 30 and “overbought” when it rises above 70. Extreme RSI values could imply an impending reversal in the stock’s direction.

XLU is trading 7% lower than the 52-week high of $57.23 it hit in November 2017 and ~13% higher than the 52-week low of $47.37 it reached in February.

Among the top utilities, NextEra Energy (NEE) and Duke Energy (DUK) stocks look strong considering the premium to their respective moving averages. At the same time, Southern Company (SO) stock looks remarkably weak given the large discount to its support levels. Southern Company is trading in the “oversold” zone with its RSI at 18. The stock has fallen more than 10% since it announced a cost increase in Plant Vogtle during the second-quarter earnings on August 8.

PG&E (PCG) stock saw a notable increase after investors took lawmakers’ attempts to amend wildfire-related laws really well. To learn more, read Where PG&E Stock Might Go from Here.