Sunday, October 18, 2015

UTIL Utilities Weekly Chart 50-Week MA Cross

The market bulls score a big victory last week pushing utilities above the critical 50-week MA. UTIL is also above its closing price 15 weeks ago and in a weekly uptrend another bullish indication for the equity market. Both indications point to a happy ending for the year. However, UTIL performed the same move in August only to collapse so that fractal may play out again.

Feb-Mar was the first sign of trouble when price fell below the price from 15 weeks prior. Note how UTIL danced along the 50-week MA from March to May. Keystone calls the 50-week moving average the trap-door and this developing drama was described in real time back then. The failure of the 50-week MA was a very bearish development and coincided with the top in the stock market. Stocks then took a few more weeks before crashing in August.

So UTIL 589.41 is an immensely important number going forward. The stock market will likely finish the year in rally mode if UTIL stays above 590. The stock market will stumble lower into year end if UTIL loses the 50-week MA. The 15-week lookback comparison number is the neon circle at 570-ish. The stock market will crumble this week if UTIL drops under 570 but price is comfortably above. Note that 3 weeks from now the 15-week lookback numbers climb towards the August highs at 605-ish. Thus, in November and December, UTIL will have to remain elevated and keep moving higher above 600 or there will be further stock market trouble.

Stock market bulls will throw confetti and buy stocks with UTIL above the 50-week MA but bears will growl loudly again if UTIL fails at 589.41. 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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