UTIL Daily Chart Daily Chart Upward-Sloping Channels Overbot Negative Divergence Price Extended Above 200 MA

In normal markets over the last decades, when the business cycle runs its course and recession is on tap, traders seek the safety of utilities since these stocks tend to get hit less hard than the broader market and offer dividends. However, these are not your Grandfather's markets. The Fed and other central bankers have distorted all price and asset relationships. A market rally should continue higher with tech and small caps leading, instead, the central banker easy money is pumping markets higher on the backs of dividend stocks, utilities, consumer staples, healthcare and other perceived safe havens. Utilities are up 80% in four years, a dramatic move for such a sleepy sector. The word boring is always associated with utes, but not anymore, utilities are rock stars in these strange markets.  UTIL is now up 17% in only the last 14 weeks, moving up at a phenomenal 1.2% per week.  The price action is now parabolic which is what you expect to see in commodities, not boring utilities. The easy Fed and BOJ money is creating the utility bubble. Note the elevated price above the 200-day MA (green dots) indicating a very over extended market.

The red overbot conditions and negative divergence wants a pull back but continued positivity in the MACD line will want to see an extra push higher in price. This chart was highlighted a few days ago (type 'UTIL' into the search box to study that chart) with the Fibonacci retracement projections based on the drop in October-November. The Fib extension at 1.24 times is the 515 level and price blew over 7 points through that extension. Each trader, or investor, thinks they are smarter than the other, placing all the easy money in dividend-producers and sitting back without worry. A 3% to 5% yield will be meaningless if weeks from now UTIL price is 20% below the current levels. Projection is for a flat to slightly higher move and then roll over moving 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.