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Utility Stocks: What Do the Chart Indicators Suggest?

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Chart indicators

Recently, utility stocks’ momentum seemed to be slowing down. Their all-time high levels could have acted as resistance. The Utilities Select Sector SPDR ETF (XLU) is trading at $58.1, which is almost 2% and 7% above its 50-day and 200-day moving average levels, respectively. The premium to both of the support levels indicates strength in XLU. XLU’s 50-day level close to $56.7 could act as a support in the short term.

XLU dma

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Relative strength index

XLU’s RSI (relative strength index) was 54 at the closing last week. The RSI implies that XLU isn’t in the oversold or the overbought zone.

The RSI is a momentum oscillator that takes values between zero and 100. RSI levels above 70 indicate that the stock is in the overbought zone, while RSI levels below 30 indicate that the stock is in the oversold zone. RSI levels at both extremes suggest an imminent reversal in the stock’s direction.

Southern Company (SO) is trading 3% and 10% above its 50-day and 200-day moving average levels, respectively. The company’s RSI is at 53. Southern Company stock has shown a steep rally this year by rising more than 18%. The stock is trading 3% below its all-time high of $53.6 in July 2016. Southern Company’s 50-day level close to $50.2 might act as a support in the short term.

Duke Energy (DUK) is trading 1% and 7% above its 50-day and 200-day moving average levels, respectively. So far, the stock has risen ~4% this year. Duke Energy stock is underperforming broader utilities (VPU).

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