Unlike the previous week, utilities were this week's only gainers:
However, the XLU is still out-of-favor relative to other sectors:
There are several reasons the XLU was up this week. The most important is that it appears the Treasury market sell-off which started the XLU's drop at the end of last year is over (I develop the idea in more detail here). Second, this week's sector movement had a defensive bent; notice healthcare (XLV) was the third best performing ETF. Third, it appears the sector is starting to get some upside technical momentum.
Public Service Enterprise Group (NYSE:PEG) -- one of New Jerseys' major utilities -- was the big gainer, rallying 4.16% (see my profile here). Next Era (NEE) was also up a little over 4% (see my write-up here). Sempra -- the one California utility that is not experiencing wild-fire issues -- rose over 3%. Edison (ED) and American Electric Power (AEP) each rose over 3% (see my reviews here, and here). Only Dominion was down. I couldn't find any major news on the company, but I think traders are starting to sour on the SCANA (SCA-OLD) deal.
Turning to the technical side, let's start with the Utilities 1-week chart:
This is not the best example of a rally, but given utilities overall underperformance over the last few months, we'll take it. Starting with Tuesday's trade, there's a general upward trend to the chart but we don't see a true trendline start until mid-Wednesday.
There are two trends on the 30-minute chart. The first is overall consolidation, which is occurring between the lower-40s and lower-50s (this trend is occurring across all sectors). Second is the uptrend that started on March 7, which has now lasted eight days and taken the sector to the top-end of its recent trading range. Finally, note that the EMAs have now taken on a bullish orientation -- all are rising and the shorter are higher than the longer.
- Prices are at the top of recent consolidation
- Prices are above the 50-day EMA
- The MACD is rising and is starting to cross-over into positive territory.
Let's look at just the EMAs from the daily chart:
There are a few individual charts that should be noted:
NextEra (NEE) is now at a 52-week high after breaking through resistance.
Sempra (SRE) is over the 200-day EMA; all the shorter EMAs are rising, as is the MACD.
Public Service Enterprise Group (PEG) is at the top-end of its recent consolidation range and looks poised to break-out to the topside. Pay particular attention to the large volume bar on Friday's trading.
Please email me if there is a particular utility you'd like me to look at.
This post is not an offer to buy or sell this security. It is also not specific investment advice for a recommendation for any specific person. Please see our disclaimer for additional information.
Disclosure: I am/we are long ED. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.