Until recently the Utilities sector was one of the market leaders. It was up over 20% percent from its September low to the late January high. Yet since then XLU has been under pressure retracing over 13% of its move up. XLU found support and rebounded, but failed to close above its 50 day exponential moving average (EMA) so far.
Now it looks like a bearish divergence is forming between the price of XLU and its AD Lines. On the chart below you can see XLU making a higher low, while both the AD Line and the AD Volume line are making a lower low.
Will this matter going forward? Its difficult to say, but during a general market correction Utilities will also be sold (possibly not as strongly as the general market). A close below March 26 low would likeley mean that our upswing entry from March 12 has failed. We still have a position in XLU open. XLU charts are located here and here
Now it looks like a bearish divergence is forming between the price of XLU and its AD Lines. On the chart below you can see XLU making a higher low, while both the AD Line and the AD Volume line are making a lower low.
Will this matter going forward? Its difficult to say, but during a general market correction Utilities will also be sold (possibly not as strongly as the general market). A close below March 26 low would likeley mean that our upswing entry from March 12 has failed. We still have a position in XLU open. XLU charts are located here and here
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