XLU trade ideas
Utility Buyers Getting GreedyUtility stocks have been on a tear recently. Just a few days ago, 93% of the stocks in the S&P Utilities Index were trading above their 200-day moving average, and now the breadth is deteriorating rapidly with just 80% of these constituents above their respective MAs.
After today's slide, it seems the line of least resistance is to the downside, at least in the short-term.
Short UtilitiesUtilities have risen along with a bond rally, stock market surge and AI-hype.
Stock market is back near peak valuation hit in late 2021, AI-hype is fading and surge in commodities is putting a lid on bonds.
XLU also firing exhaustion signals.
Utilities Getting Ahead of ThemselvesLong term bullish on Utilities, but this is quite the move over the last few weeks.
Looks exhausted with the latest Friday candle forming a -> dark cloud cover.
Also interest rates have not dipped that much to push this interest rate sensitive sector higher, perhaps hype around AI energy usage is driving this.
Trade: Short term pull back -> bear credit spreads
XLU ShortXLU high probability Short from here. 100% extension (AB = CD).
Historically pullback whenever RSI is over 75.
Utilities setting up?The daily chart on XLU provides rationale to keep a place on our watchlist. Recently it made a golden cross and seems to have broken free of a downdraft in price. Now it looks like the RSI could be searching for overbought.
One option is a momentum trade targeting the $71+ price. Personally I'd like to see it hit overbought, then that a position of it pulls back down around the 50 & 200 day MSAs. Looks like with some patience there could be 15% out there depending on how things develop.
xlu
#xlu AMEX:XLU Utilities are starting to rotate, moving opposite to AMEX:SPY #spy #trader #investor #stockmarket
XLU Potential Breakout $XLUXLU Potential Breakout Analysis
AMEX:XLU is indicating a potential breakout based on technical analysis, suggesting an opportune moment to consider exploring the utilities sector.
Why Utilities Sector?
The utilities sector is recognized for its defensive characteristics and stable performance, making it an appealing choice for investors seeking a haven during market volatility. Companies in this sector typically provide essential services such as electricity, water, and gas, which are in constant demand regardless of economic conditions.
Noteworthy Companies in the Utilities Sector:
NextEra Energy ( NYSE:NEE ): A leading clean energy company focusing on renewable power generation, transmission, and distribution. NextEra Energy's commitment to sustainability and innovation positions it as a key player in the utilities industry.
Duke Energy ( NYSE:DUK ): An electric power holding company serving millions of customers across several states. Duke Energy's established presence in the utility sector and ongoing investments in infrastructure make it a reliable choice for investors.
American Electric Power ( NASDAQ:AEP ): One of the largest electric utility companies in the United States, providing electricity to millions of customers in various states. With a strong emphasis on modernizing its grid and embracing renewable energy sources, American Electric Power is set for long-term growth.
Exploring investments in these companies within the utilities sector could offer a combination of stability and potential upside. Stay tuned to AMEX:XLU for further signals of a breakout to seize the opportunity effectively.
XLU A utilities ETFThis vanguard fund appears to have broken a bearish down trend and has broken past the 200 day EMA. Order blocks show some strength near this level. If you are bullish, you can even use UTSL for a 3x leverage play on this sector.
XLU Weekly Chart Nothing to see here. I know very little about this industry. The return of this ETF has been poor, 5year 9.78%.
Opening (IRA): XLU April 19th 62 Covered Call... for a 60.31 debit.
Comments: For lack of something better to do, looking to grab the March dividend here, which should be in the vicinity of .60/share.
The top 5, options liquid dividend-yielding ETF's are: EWZ (10.90%) (paid twice a year in June and December); EFA (5.27%) (paid twice a year in June and December); XLE (3.78%) (paid in March, June, September, December); XLU (3.16%) (paid in March, June, September, December); EEM (3.10%) (paid in June and December); EWW (3.08%) (paid in June and December).
Will look to roll out the short call on test of my break even, but will otherwise leave it mostly alone until the dividend drops into my account, which should occur sometime in the third week of March.
XLU short put exp Mar 15Sold the 58 strike on XLU yesterday afternoon.
It hit a weekly level and looked like it wanted to stop selling with small candles on the down move.
Kind of in between the higher time frame declining -1 sig and the rising -1 sig with the best inflection point on VWAP. It's that weekly rejection that I'm anticipating happening.
The strike is positioned at 58 which is a weekly level 2 down.
There's another one closer in at 59.31 that I'm thinking will play some defense.
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Symbol XLU
Open Date 1/18/2024
Put or Call Put
Expiry Date 3/15/2024
Short Strike 58
Long Strike 57
Price to Open 0.16
Min Width Multiple 2
Risk Ratio 5.25
Return on Risk 19.0%
Opening DTE 57
1 Day ROI% 0.33%
Max Annual ROI % 122.0%
Buyback to Close
Open to Roll
Closing % Cost on Opening Credit
Net Roll % on Opening Credit
Closing Date
Closing Price
Closed Margin ROI %
Closed Annual ROI %
$XLU: Utilities bottomed mid termVery nice low risk buy in AMEX:XLU here, upside is substantial vs risk.
The trend signal here predicts upside for 7 weeks or less, until $71.30 is hit, as long as the stop loss area is not reached (below $61.97 in this case).
You may use this sector ETF signal to research individual names that might have higher reward to risk or interesting fundamentals as well...
Best of luck!
Cheers,
Ivan Labrie.
XLU vs SPX. Good or bad?In the past, when we touch the bottom of the channel it marks a local top and we go down from here.
Will this scenario repeat?
XLU Utilities making a clear statement to Sellers.Utilities (XLU) almost hit this month the Higher Lows trend-line that has been holding for exactly 21 years (since October 2002) and immediately responded with a strong rebound that has already turned the 1M candle green. All this price action taking place in less than 2 weeks, which indicates considerable market movement.
Amidst of all that, it broke below the 1M MA100 (green trend-line) for the first time since the COVID crash (March 2020). If it manages to close the month above it, it will be a strong statement towards all direction that the sector considers this level a Support and possibly the end of the Inflation Crisis.
Watch closely and you will see that this and the COVID crises are connected with a Higher Highs trend-line, similar to how the DotCom and Housing crises where in the 2000s. Technically this is a straight Higher Highs trend-line that connects all Highs and places the last 21 years of market into a Mega Rising Wedge pattern.
The 1M RSI is on a Lower Lows trend-line, which indicates a natural deceleration of the trend but as long as it holds, it sustains it. And right now it is exactly on that trend-line.
Do you think this can be a strong message to sellers?
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XLU - Hold Utilities for ConsistencyUtilities are basically yesterday's tech stocks. In the late 1800s, the stock market ditched railroads and moved on - to utilities. In fact, there was a time where speculation ran rampant and panics were set off based on the movement of utility stocks.
Today, utilities are the opposite of tech stocks. They are basically the most consistent and boring stocks you can find on the market. The utility SPDR (XLU) yields 3.3% on dividends & is a very good composite of the utility sector. It has gone up 16% over the past 5 years, which pales in comparison to the S&P 500 (43%.)
The only reason you would want to hold onto them for the long term is that you can be absolutely sure they will stay & keep paying dividends as long as the US stays alive.
Right now, XLU (and pretty much all utility stocks) has come down sharply. It briefly reached the key range near $61 only to sharply rebound.
Because utilities are so consistent, they will generally crash and rebound pretty sharply.
In 2020, utilities crashed quickly & stayed down due to extreme volatility. When you have any short of sharp decline, utilities usually move with the trading day and sometimes even underperform.
In 2008, utilities crashed and stayed generally undervalued for a while.
In 2000, utilities also crashed and stayed undervalued for a while. This may have been due to the Enron scandal around the time.
If you are worried about 1970s-like stagflation, you will be pleased to hear that utilities outperformed during the time and generally stayed flat. (The only catch is that during a major crash, they are not completely immune and will probably go down.)
From a trading perspective, this is a great time to enter because you can be pretty sure that within a few weeks, XLU will rebound to as far as $74 within a matter of weeks.
From an investing perspective, this is also a great time to enter if you like utilities.
Often, people who are very bearish miss out on a lot of gains because they do not hold anything for the very long term.
Utilities are sort of the most defensive stock option, and I would recommend them if you think a super financial crisis is approaching.
You can hold them with minimal fear of stock declines. In fact, they stand to profit from the issues we may be facing - stagflation, energy crisis, etc. Plus, you get a steady flow of dividends that you can reinvest.
In normal conditions, utilities underperform - but overall, they outperform during bear markets.
You could even pick pretty much any regional utility. I did some chart analysis on DUK (Duke Energy) and found it had also bounced off a key support. Almost all the utilities have the same chart pattern, with the exception of troubled ones like PG&E.
In summary, I would go long utilities here if you don't know what to pick in this time. You can be almost certain buying for both the long and short term that utility stocks provide value.
XLU Utility ETF Is Signaling DANGER!?One of the major mistakes i have seen economists make is to not understand
the importance of markets. They are not traders or investors. As such they
lose a great deal of insight by not putting their hard earned money at risk.
I have indexed XLU AND NDX to get an accurate reading how they are behaving relative
to each other. One of the many great features of Tradingview not utilized enough IMO.
I created this chart bc I have sensed a slight shift in my portfolios performance. While still
early, This in the past has clued me in to market shifts. With hat in mind I am examining
how money flows may shift in the near future.
Is there evidence a shift in markets maybe coming?
Utilities are about as boring of an investment as there can be.
XLU generally considered safe and a great place to park cash with dividends
in a ZIRP (zero interest rate policy).
As you can see, it has all the right setups for a BKC short. If my reading of the data is right,
than we maybe headed for a cliff in the near future. If something as safe and boring as XLU
is about to go, than money has no place else to go and massive selling is likely to trash all
the stock indexes. Bad juju for your portfolios and even worse if you are levered long,
Lastly I don't use the word "danger" lightly. See Puke It Up Videos
XLU & NEE - What happened to utilities?This has been a rough month for utilities. We might be due for a slight bounce, but this sectors regulated pricing, dependence on debt, and previous attraction to income investors (now better served by treasuries) are all likely to be ongoing headwinds.
Some key shifts in trend are highlighted:
Beginning of 2022 the Fed starts easing rates higher and begins QT. This makes utilities attractive relative to the S&P
Mid-2022, rates continue higher, QT advances, and utilities and the broader market begin to move in correlation
October 2022 was peak tightness for global liquidity and some of us believed that we were close to peak rates.
The last milestone is where trend in utilities began to shift. QT pauses at this point and global net liquidity expands. This sends growth oriented equites to the performance that we witnessed through July 2023, and marks a time that I wished I started shorting utilities.
Note that SDP (ultra short utilities) appears to be in a parabolic wave 5. This makes me suspect potential for a reversal and a bounce in utilities, but I would view this as an opportunity to exit and reconsider either XLU or SDP after the ABC correction.
A MAJOR BOTTOM is now setting up 54 handle or the alt 51 BUYING The chart posted is the of the XLU we had a very clear 5 waves up from oct 2002 and we are nearing the long term trendline 21 yrs long and a .382 retracement . it has dropped in the form of an abc decline and a triangle to form wave X or B I tend to view it as an X since the peak on july 26th it has a classic ABC decline and it is now 70.2 days long most panics take 55/62 days and in 1929 lasted 72 days and the bulk of the panic the damage was in 8 to 13 td we made the low so far on day 13 .I am now in calls net long at 90 % in the money mid spring 2024 and will move to 100 % if we make ANY NEW LOWS
MAJOR LONG TERM SUPPORT LINE COULD BE BROKEN SOONWe are very close to a breaking of a 21 year trendline MY fib work says we will btw and we should see a panic drop to about a 50/51 handle god help us if we break this target
XLU: how the Fed's interest rate hike affected utility stocksThe stock market is currently experiencing the adverse consequences of the US Federal Reserve's decision to hike the interest rate, with the Public Services sector taking a particularly hard hit. Public services, being typically the last to be paid by citizens, compelled companies to rely on short-term loans during periods of low interest rates to cover cash shortfalls. However, the cost of servicing such loans has now significantly increased, leading to higher losses.
Today, our focus shifts to the XLU ETF chart, which is invested in utility stocks.
On the D1 timeframe, resistance has formed at 59.80, with support at 58.71, which was broken through yesterday. If quotes consolidate below this level, it is likely that the downward trend will continue.
On the H1 timeframe, the short-term target for the price decline is around 53.77, with the possibility of further declines to 51.70 in the medium term. The likelihood of price growth appears to be extremely low.
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Symmetrical TriangleTop line slopes down and bottom line slopes up.
Price broke down from the triangle and met target 1.
Doji/indecision at support today.
No recommendation.
This seems to move down when Teck/market is in an upswing and vice versa.
NextEra Energy Inc
14.83%
Southern Co
8.12%
Duke Energy Corp
7.75%
Sempra Energy
4.85%
Exelon Corp
4.38%
American Electric Power Co Inc
4.37%
Dominion Energy Inc
4.28%
Constellation Energy Corp
3.80%
Xcel Energy Inc
3.43%
Consolidated Edison Inc
3.39%
Total
Crash Incoming finally?Stock Market Crash begins this week??
Looking at Utilities.... they are perched on the same trendline before they crashed in 2002 and 2008...
Reason it could start tomorrow after hours....
1. Crashes usually happen when your oversold... We are right now
2. Bonds are in position for a crash
3. DXY is ready to Rocket
4. Nvidia earnings after hours tomorrow..... the company that created this massive bear market rally... Nvidia is the AI king... And as the AI king they provided crazy guidance last earnings which created this massive bull market limited to tech.... No company has every had earning guidance for the next quarter with such a massive jump... Can they do it...sure.. they are selling AI chips for 30K a piece...
The problem is supplies..... I'm not sure they were able to deliver the crazy outlook they promoted due to supply constraints plus I think AI mania is dying down....
Basically if they don't make earnings .... I believe that will be the catalyst for Nvidia stock to crash and start bringing the market down with it....
Even if they somehow make earnings if their guidance isn't shooting for the moon still that could kill the mania....
I thought the market would crash till AI saved it... So now I'm wondering if AI could be the catalyst that kills the market. It makes perfect sense... Most everyone is no longer short....
I see no reason for this market to keep going up from here.... it needs a catalyst to knock it down...
All the analyst and most people think Nvidia will kill earnings... The market loves to catch people offsides...this would be the perfect moment.
5. JPowel Friday
6. Mercury goes into retrograde tomorrow 8-23-2023 (bad for technology)
