Sunday, September 29, 2013

UTIL Weekly Chart Sideways Symmetrical Triangle

Utilities are important this week and moving forward. Most algo's program two important numbers, the weekly closing price 15 weeks ago to determine if there is an ongoing up, or downtrend, and, the 50-week MA now at 483.54, call it 483.57 if price moves higher for a potential cross. The weekly closing price 15 weeks ago is the low print in June at 471.77, an easy beat for bulls this week so this will create broad market lift. UTIL is at 482.19 under the 483.54 so this helps the bears. Note that the 15-week look-back number is much higher for the next week at 485.90. At 4 PM Friday, as the week ends, pay attention to the 485.90 since it will set up trading for the week of 10/7/13.

Considering the two 15-week look-back numbers in play for the next two weeks, 471.77 and 485.90, use this as a sideways channel bracket at 472-486. Market bulls will win above UTIL 486 and bears will be happy under 472. The 50-week MA at 483.57 serves as the main rudder since price relative to this number tells you which side is favored moving forward. If UTIL was to collapse this week under 472, it would be an important signal forecasting significant market downside ahead. Since the 15-week look-back number at 472 is far under the 50-week MA, the UTIL trap-door is closed. The 472 represents the trap-door for markets this week and the 483.57 is the trap-door for the week of 10/7/13.

Utilities are moving sideways through a symmetrical triangle and not tipping a hand as to which side will win moving forward. The vertical side of the triangle is about 80 handles, so a bull breakout at 495 targets 575 while a bear collapse at 475 targets 395. The move in the utes will also likely forecast the move of the broad indexes forward so a lot is riding on the triangle pattern. Note that price may move sideways for another month remaining inside the triangle not making an up or down decision. For this week, UTIL 471.77 and 483.57 matter, so price begins in the middle. A move above 483.57 and equities are likely headed higher. If UTIL stays under 483.57 this week, utes will likely simmer in the background but come Friday at 4 PM, when 485.90 and 483.57 become important for the set up for the following week, the bears may be favored. If Friday's close is above 486, that likely signals bullish markets ahead for the next week and that markets are probably rallying late this week. For now, the market bears have a slight advantage. Watch the 10-year yield since up yields means weak utilities and down yields means up utes. This information is for educational and entertainment purposes only.  Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.

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