On a technical basis, XLU appears poised for more near-term upside.
“The daily chart for the utilities sector ETF shows that the fund entered 2014 below its 200-day SMA, which was then at $38.51. The ETF has been above its 200-day SMA since Jan. 31 and tested this moving average as a technical support at $40.54 on Aug. 6. It gained 22% from that point to its all-time intraday high of $48.76 on Friday,” reports Richard Suttemeier for the TheStreet.com.
Earlier this month, it was noted that XLU’s relative strength when measured against the S&P 500 was flirting with a breakout, one that has since been confirmed. That could signal a potential rally for utilities in 2015 as well. Additionally, a breakout would also confirm the low rates thesis that Treasury yields will remain low, pushing investors to alternative sources for income.
Utilities Select Sector SPDR
