Saturday, April 26, 2014

UTIL Utilities Weekly Chart Sideways Symmetrical Triangle Upper Band Violation Negative Divergence Developing

Traders are tripping over each other to buy utilities and consumer staples stocks each thinking they are smarter than the other hiding out in high dividend and safety plays in case there is any broad market downturn. If the markets head south, as is expected moving forward with the stock market already at a multi-year top or placing the top within a month or so, nothing will be safe. All sectors and stocks will be beaten. Utilities rolling over to the downside are typically a bad omen for stocks so the top in 2013 was very ominous. However, the Fed, BOJ and other central banker intervention continues to overrule any negativity.

Utilities begin launching in December and catapult from 475 to over 550 in less than four months, a huge +16% upside orgy. The sideways symmetrical triangle pattern targets the 560 level (490 breakout plus 70 handles for the vertical side of the triangle equals 560) so price is already close enough for government work. Stochastics, money flow and the histogram are all topped out and ready to give up the ghost. Ditto the RSI and MACD line over the one year time frame, however, in the short term, on this weekly basis, the RSI and MACD line want to see some further highs in the week or three ahead.

Volume is decreasing as price continues the parabolic rise. Price has violated the upper standard deviation band so a move back to the middle band at 511 and rising is in play. Keystone follows the weekly trend by comparing the current print to the print 15 weeks ago and bulls are completely in charge with a continuing uptrend. The 50-week MA is also important but price is well above this 500 level as well. In a market downturn, all those running into utilities right now for safety and a dividend will likely become very disappointed. A price drop to 500-530 will negate the joy of a dividend.

Price has momo so utes need a couple-few weeks to top out and the 560 remains in play but the expectation is for a top and roll over to the downside sometime over the next month. Utes appear too far extended to buy long and are not yet topped out to go short. 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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