Utilities In Danger Of Breaking 9-Year Support Line

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:

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

Below looks at the chart of XLU over the past 18-years:

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 and they could be sending a message that interest rates could be moving higher.

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Author: Travis Esquivel

Travis Esquivel is an engineer, passionate soccer player and full-time dad. He enjoys writing about innovation and technology from time to time.

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