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Can Utility Stocks Continue Strong Trading?

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Moving averages

With a notable fall on October 26, the Utilities Select Sector SPDR ETF (XLU) is now below its 50-day simple moving average. It’s currently trading marginally below its 50-day moving average and 3% above its 200-day moving average. A moving average of $51.40 will likely act as a support for XLU in the short term.

XLU dma

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Relative strength index

XLU is currently trading at an RSI (relative strength index) of 44. A stock is considered oversold when its RSI falls below 30 and overbought when it’s above 70. An extreme RSI value suggests an impending reversal in a stock’s direction.

Short interest

Short interest in XLU increased 10% as of October 15. The total shorted shares in XLU were 62.3 million on September 28, while its total shorted shares increased to 68.6 million as of October 15.

An increase in short interest could imply that more investors expect XLU to fall from its current price levels. Short interest is the number of shares that are sold short and not covered yet. Short interest measures investor anxiety.

Top utilities’ chart indicators

Among the top utility stocks, NextEra Energy (NEE) is currently trading marginally below its 50-day moving average and 4% above its 200-day moving average. Its slower moving average of $163.75 could act as a support for NEE going forward.

Southern Company (SO) stock is trading 1% above its 50-day moving average and marginally below its 200-day moving average. Its faster-moving average of $44.25 could act as a support in the short term.

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