UTIL Utilities Daily Chart Rising Wedge Overbot Negative Divergence

A spank down occurs for utes over the last two days due to the negative divergence Keystone has discussed in recent days. The weekly chart is negatively diverged as well which signals continued weakness ahead.  The red rising wedge, overbot RSI, stochastics and money flow, and negative divergence as shown by the lines for the indicators, all caused the smack down.  The behavior in the utilities is very important since when they lead the broad indexes lower the move lower for markets is substantial, extended and troublesome. Thus, over the coming days and couple weeks, watch UTIL closely. Price remains elevated despite the spank down and would need to drop into the 450's before serious trouble is signaled.  Watch to see if the utes continue to lead lower, or not.  If so, it is prudent to become increasingly skeptical of any market upside and continual paring of long positions would be in order.

Also of interest is the textbook two-leg bull flag pattern shown in neon green.  From 450 to 473-ish is 23-ish. The sideways consolidation flag forms as price drifts lower. You will see this behavior over and over for this pattern. Once the sideways consolidation finishes and price starts higher again, for this chart, say from 463, calculate the target.  463+23 = 486.  Looking at the long candle shadow showing the intraday pop two days ago, the 486 target was tagged completing this pattern. 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.