The Select SPDR Utilities ETF (XLU +0.4%) has already had a nice run this year - up 9% from an early January low - but technician Michael Kahn sees more gains ahead, noting it popped out of an 8-month trading range last week and money is flowing in (based on a gauge measuring volume on up days vs. down days) for the first time in nearly a year.
Stocks such as Public Service Enterprise (PEG +0.5%) and CMS Energy (CMS -0.1%) are mirroring the ETF's chart, but Kahn sees better opportunities in names closer to 52-week lows. Of note in this category are PG&E (PCG +0.9%) - just out of a trading range and above its 200-day moving average for the first time since the summer - and Southern Co. (SO +0.1%). After moving sideways for six months, Southern has rallied to the top of its range and is pausing at its 200-day moving average. Any continued strength would break both the trading range and the 200-day.