Sunday, May 28, 2017

UTIL Utilities Weekly Chart; Potential M (Double) Top; Overbot; Negative Divergence

Utilities catapult +2.4% higher last week as yields and rates remain subdued. The red lines show price at the summer 2016 highs  with the chart indicators negatively diverging. The RSI line is sneaking out some additional upside juice over the last couple months which may lead to another jog move in price (down-up) for a higher high in this weekly time frame. The monthly chart is negatively diverged across all its indicators and ditto the weekly chart above over the one-year time frame. The stochastics are overbot agreeable to a pull back in price.

UTIL violated the upper standard deviation band during February and March so the middle band and lower band are in play, however, price shows disrespect by ignoring the middle band. The upper band is at 728 so price may want to spurt up to touch that but considering that price has not yet shown respect to the middle band, which is also the 20-week MA, at 690 and rising, the bears likely have a slight edge in trying to pull price down to at least touch this middle band. You can see a distinct M Top or Double Top in play with only the last downleg of the M needed.

Keystone highlights the UTIL chart when it is impacting broad stock market direction. The old-timer's watch the price from 15 weeks ago and the 50-week MA as two key intermediate and long-term signals for the broad stock market. When utilities roll over to the downside, the stock market will typically be dropping as well, or, after the utes roll over and begin trending lower, the broad stock market should roll over within a couple months. Thus, the utilities must be watched closely going forward. You may be witnessing a multi-year topping process for the stock market playing out.

The blue circle and line show the price at 672 for 15 weeks ago. The 50-week MA is at 679. With the UTIL price way up at 720 it is unlikely the market bears can send utilities below either number. However, for the following week, the week of 6/5/17, the important numbers to watch will be 699.49 and the 679-ish. The UTIL 699.49 number is key come 4 PM Friday, 6/2/17. If UTIL ends the week under 699.49, the stock market will be in trouble beginning Monday, 6/5/17. The market bulls must keep the UTIL price basically above 700 going forward otherwise, there will be trouble coming for the stock market. Keep an eye on utilities. 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.

Note Added Monday Morning, 6/5/17: UTIL explodes +1.7% higher last week to 732.63. Traders are buying utilities with both hands. Comically, the major indexes are printing new all-time record highs with utilities at record highs.

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