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XLU: What to Expect from Utility Stocks

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Moving averages

The Utilities Select Sector SPDR ETF (XLU) is trading at $53.2, which is almost 2% below its 50-day and 1% above its 200-day simple moving average level. The level close to $52.7, its 200-day moving average, will likely act as a support in the short term. XLU’s RSI (relative strength index) as of January 11 was 51, which implies that it isn’t oversold or overbought. RSI levels at extremes suggest an imminent reversal in the stock’s direction.

XLU dma

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Short interest

The short interest in XLU increased 8% on December 31. On December 14, there were 54.3 million shorted shares in XLU. The total shorted shares increased to 58.4 million on December 31. An increase in the stock’s short interest could indicate that more investors expect it to fall from the current price level. The short interest indicates the number of a company’s shares that have been sold short and not squared off yet.

Top utilities’ chart indicators

NextEra Energy (NEE) stock seemed to have taken the support of its 200-day moving average level. NextEra Energy is trading marginally below its 50-day moving average level at $176.4. NextEra Energy’s RSI is at 60.

At the same time, Southern Company (SO) stock is trading 2% and 3% above its 50-day and 200-day moving average levels, respectively. The 50-day level close to $45.9 could act as a support for Southern Company in the near future. The stock appears to be on the verge of the “overbought” zone with its RSI at 70.

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