Watch the Utilities here! $XLU – November 26, 2024
This is Scott McGregor at Scott Trades on Twitter with StockMarketMentor.com and your Chart of the Day. I want to look at the Utilities Sector ( NYSEARCA: XLU ).
I won’t focus on one utility company generally, but I definitely like what the Utility ETF ( NYSEARCA: XLU ) is doing here, it is breaking out to new highs. I know it’s typically a low-volume week with Thanksgiving coming up but this is still a pretty good sign. This is making new highs when the market ( NYSEARCA: SPY ) is near new highs.
This is definitely a sector that I think we want to pay attention to for a while. In my opinion, this is definitely one of the sectors that are helping lift all stocks, it’s not just the Magnificent 7 anymore. so definitely keep an eye on utilities.
From a technical level, I see this clear resistance right up here at around 82.50. We pulled back under the 50-day moving average, gave sellers a chance to get out, and gave buyers a chance to get that dip. Then it came back above these moving averages and marched basically straight to the highs. Then again today it got above and did it on just okay volume.
Again, it’s a low-volume week but I’m more concerned with what price is doing relative to the general market. I definitely like what’s happening here with utilities. I think this is a sector you want to keep an eye on. If it does pull back, maybe comes back to that 8-day exponential period moving average, if the 8-day comes up like this, and the Utility ETF bounces off that 8-day, I think that could be a great risk-defined entry.
Ideally what happens is, that this thing continues to march higher. We get that pullback and then we see this thing just going up and following the market higher. That’s what I would look for on XLU ( NYSEARCA: XLU ). Look for a pullback to the 8-day exponential period moving average. Look for a bounce off of the key moving average, and then define your risk at that level.
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