UTIL Utilities Weekly Chart; Battle at 50-Week MA; Tightening Standard Deviation Bands; Potential Two-Leg Bear Flag

For utilities, the battle at the 50-week MA at 665.97, call it 666, is very critical. This is a great indicator for the stock market in the intermediate term (weeks and months) and bulls score big  by pushing UTIL back above 666. This drama at the 50 has been ongoing since November and Trump saves the day with promises of less regulation, lower taxes and big infrastructure spending. 

The price 15 weeks ago is also key since it determines the trend which influences the broad stock market. That comparison price is 653 (black circle) an easy beat for UTIL so this is a weekly uptrend for utilities. The comparisons become easier for the bulls to beat for the following four weeks. The bears desperately need utes to drop hard. Bears need price under 666 pronto or they will be slapped hard going forward with stock prices remaining elevated for several weeks ahead.

The tight bands are squeezing in so a big move will likely occur anytime forward say over the next couple weeks. Price looks like it is rocketing higher but the tight bands may turn price south over the next week or two. The behavior in utes to end this month is very important as the battle for the 50-wk continues.

The potential two-leg bear flag (blue lines) may come into play with price now consolidating sideways with an upward bias forming the flag, or pennant, as the pattern should. The first leg was the drop from 720 to, let's cal lit 620 to make the math easy, so that is a 100-point drop. Thus, if the second leg down for the bear flag begins from 670, the pattern would target 570, and this move would portend bad mojo for the broad stock market this year. Watch it closely.

For this week, market bulls win big and upside euphoria for the stock market continues if UTIL remains above 666 and heading higher. Bulls and bears will duke it out with the upside in equities stalled if UTIL trades between 653 and 666. If UTIL collapses and begins that two-leg bear flag pattern south, the stock market will be in big trouble going forward. 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.