UTIL Utilities Weekly Chart Overbot Rising Wedges Negative Divergence

The blue negative divergence resulted in a smack down as was forecasted in october; price dropped to the lower rail of the upward-sloping channel. Price then popped back up off the lower rail over the last month to punch out a higher high and touch the top rail of the channel again. This results in another rising wedge and negative divergence (red). This is a significant top forming. The momo was strong last week so that type of move will need to move across in a stutter step, M top type movement, and then roll over as the weeks and months tick by. For this near term red wedge, however, the spank down is needed now.

Note the buying volume for last weeks huge move was the least since late summer making the move unenthusiastic. For this last trading week of the year, the 440 level is critical. Market bulls will enjoy broad index buoyancy as long as price stays above 440. If 440 is lost, the broad markets will sell off. The 50-week MA represents where the broad markets would go into free fall, 428-430, but at 463 now, the utes are comfortably above the two danger levels (neon green lines) and this worry is not currently on the table. Things can change quickly, however.

Projection is for a pull back now due to the red negative divergence, then a continued topping action thru 440-470 with sideways to sideways lower prices moving forward. Would not be surprising to see this 465 area as the long-term high. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here or any links connected to this information. Consult your financial advisor before making any investment decision.