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XLU: Where Utility Stocks Might Go from Here

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May. 20 2019, Published 1:25 p.m. ET

Chart indicators

Currently, the Utilities Select Sector SPDR ETF (XLU) is trading at $58.8, which is more than 1% and 6% above its 50-day and 200-day moving average levels, respectively. The premium to both of these support levels indicates strength in the stock. The levels close to ~$58.0 and $55.2 could act as support for XLU in the short to medium term. XLU’s RSI (relative strength index) was 64 at the closing last week.

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

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Top utilities’ chart indicators

NextEra Energy (NEE) stock is trading in the “overbought” zone with its RSI at 79. The stock has shown solid movement. So far, NextEra Energy stock has risen more than 15% this year. NextEra Energy stock hit an all-time high of $199.5 last week. The stock continues to look strong given its simple moving averages. NextEra Energy is trading 4% and 11% above its 50-day and 200-day moving average levels, respectively.

Southern Company (SO), the top regulated utility stock, is also trading at its all-time high. The stock is trading 3% and 13% above its 50-day and 200-day moving average levels. Southern Company stock is trading at an RSI of 61, which indicates that it isn’t in the “overbought” or the “oversold” zone.

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