The Utilities sector has been on my mind lately.
Following a 25+% rise from August of last year, the Utilities SPDR Sector Fund, XLU, retraced over half of its move. It rebounded from the low in mid-March, but now XLU clearly stalled at the 50 day Exponential Moving Average (EMA). In fact the price was rejected at the 50 EMA for 5 times! (see chart)
On April 6th I was hopeful, as XLU closed above the 50 EMA, but on April 7th it clearly failed and closed below it again printing a long red candle.
I also recently wrote about a bearish divergence in XLU between the price and the underlying XLU AD Lines (internals).
Frankly, I am not liking this price action. We still have a position open in XLU that we opened on April 12th, but I started cutting this position to lock in some gains and moved the protective stop to break-even.
Chart of XLU
Following a 25+% rise from August of last year, the Utilities SPDR Sector Fund, XLU, retraced over half of its move. It rebounded from the low in mid-March, but now XLU clearly stalled at the 50 day Exponential Moving Average (EMA). In fact the price was rejected at the 50 EMA for 5 times! (see chart)
On April 6th I was hopeful, as XLU closed above the 50 EMA, but on April 7th it clearly failed and closed below it again printing a long red candle.
I also recently wrote about a bearish divergence in XLU between the price and the underlying XLU AD Lines (internals).
Frankly, I am not liking this price action. We still have a position open in XLU that we opened on April 12th, but I started cutting this position to lock in some gains and moved the protective stop to break-even.
Chart of XLU
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