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Utilities In Danger Of Breaking 9-Year Support

ByChris Kimble
Published 01/10/2018, 11:42 AM
US500
-0.67%
XLU
1.20%

Utilities ETF XLU has had a rough go of it the past two months! Below compares XLU to the S&P 500 over the past year-

Utilities Select Sector SPDR (black), S&P 500

Sometimes utilities are viewed as interest-sensitive assets. XLU was keeping pace with the S&P over the past year (sometimes ahead of it) until mid November last year, when they started heading south, backing off nearly 10% from the highs.

Below looks at the XLU over the past 18 years.

18-Year Utilities Select Sector SPDR

The recent softness in XLU is testing 9-year rising support at (2) above. Support is support until broken.

If XLU breaks support at (2), selling pressure could take place in this sector, which could mean that interest rates will move higher.

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