We are at all time highs with XLU, should've entered at long day bearish candle pull back, but clearing this bearish hammer and locking all this buyers is good enough with me. Not much in our way till MA 100.
Updates coming from the previous "Banks Look Cheap vs Utilities" chart. For those who don't remember here are the flows we have been tracking:
Now it is clear US 10-year Yields are starting to withdraw again, although this time Banks vs Utilities are less affected. I have been talking with clients recently around this space and there is broadly no concern....
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Investing position about Supply-Demand(S&D) strength: In Rising section of high profit & low risk
S&D strength Trend Analysis: In the midst of an upward trend of strong upward momentum stock price flow marked by the temporary falls and strong rises.
Today's S&D...
Bear Case:
*Forming H&S
*Massive RSI Divergence
Bull Case:
*China
*** Looks like XLU might look to form a H&S, but based on how heavily the RSI has dropped, it might not even bother and just drop. In either case, Short the top of the Right Shoulder or a break of the neckline .... Let's talk about it! ***
XLU is a massive, highly liquid fund that only invests in utility companies that are included in the S&P 500. It is one among the cheapest and most liquid options. I am expecting a structural break down. Will only enter if the relative upward strength or the volume of the pair runs out. I have identified the same structure on RSI below. Have a look.
