XLU: Where Utility Stocks Might Go from Here



Moving averages

Utility stocks (VPU) seemed to have slowed down after hitting multiyear highs last month. The Utilities Select Sector SPDR ETF (XLU), the representative of top utility stocks in the country, is trading at $58.21, which is almost 2% and 7% above its 50-day and 200-day moving average levels, respectively. The 50-day levels close to $57.14 could act as a support for XLU in the short term.

XLU dma

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At the close on April 12, XLU’s RSI was 58, which suggests that it isn’t in the oversold or the overbought zone. Southern Company’s (SO) RSI was 67, while NextEra Energy’s (NEE) RSI was 45 at the closing last week. Southern Company stock has risen ~20%, while NextEra Energy has risen more than 10% in 2019.

Short interest

The short interest in XLU decreased 1% on March 29. On March 14, there were 46.7 million shorted units, while the total shorted units decreased to 46.3 million on March 29.

A fall in the stock’s short interest could indicate that fewer investors expect it to fall from the current price level. The short interest implies the number of a company’s shares that have been sold short and not squared off yet.

XLU is trading 1% below its 52-week high of $59.07, which it hit late last month. XLU has risen more than 20% since its 52-week low of $48.35 in June last year.


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