Relative strength index
The recent strength in broader utilities has put many stocks in the “overbought” zone. The Utilities Select Sector SPDR ETF (XLU) is trading at an RSI (relative strength index) of 78, which implies that it’s overbought.
RSI values below 30 suggest that the stock is oversold, while values above 70 suggest that the stock is overbought. An RSI at either extreme indicates the imminent reversal in the stock’s direction.
Most of the top utility stocks are trading in the overbought zone. NextEra Energy (NEE) and Southern Company (SO) are trading at an RSI of 76 and 73, respectively, while Duke Energy (DUK) and Dominion Energy (D) have their RSI levels at 86 and 78, respectively.
XLU is trading at $55.7, which is ~3% and 5% above its 50-day and 200-day moving average levels, respectively. The fair premium to both of the support levels indicates the strength in XLU. The levels around $54.0 and $52.9 are expected to act as resistance for XLU in the short term.
XLU is trading 2.6% lower compared to its 52-week high in December. XLU has rallied more than 15% since its 52-week low in February 2018.