UTIL Utilities Daily Chart; Overbot; Rising Wedge; Negative Divergence; Upper Band Violation

Keystone has started to short utes the last few days and is getting beaten-up. The drop in Treasury yields send utilities to the moon. Utilities like low rates since they have to fund long-term projects worth billions of dollars. When rates climb, utes are whacked.

For the US stock market to roll over and die on a long-term basis, the utilities would be expected to lead lower or at least work lower coincidentally. The big recovery in utes is a big plus for the stock market bulls. When UTIL or XLU roll over and begin trending lower on a weekly basis, you will know that the broad stock market may be in serious trouble from zero to two months in the future. So you must keep an eye on the behavior in utilities.

On the daily chart, price comes up into the rising wedge, has overbot conditions, negative divergence across all indicators and has violated the upper band. UTIL just checked all the negative boxes. Price should receive a spankdown in this daily time frame beginning anytime. UTIL will likely seek the middle band at 771 as a downside target. On the 2-hour chart, it looks like today is the top so if you want to short utes, get off the pot and consider the position.

It will be tricky, however, since the weekly chart has a long and strong RSI and MACD still yet, so after a few days or week or so of down, UTIL should come back up again for a matching or higher high. At that point, the RSI and MACD will likely go neggie d on the weekly chart and identify a significant top likely in April that will then lead to multiple weeks of downside (read the second paragraph again).

So, if you are nimble, short utes now and that should work out in the coming days. You could then cover that short or let it ride on a longer term basis (for several weeks or a few months). UTIL is making a top now, will drop, and then will likely come up to this same level say in three weeks (April) for a double-top, and that will likely be all she's got. That point in time will allow for a nice short entry.

Since utes are expected to move lower due to the sad daily chart above, the possie d on the TNX chart should continue and yields would be expected to float higher. 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 8:11 PM EST on Monday Evening, 4/1/19: UTIL slips away from the neggie d dropping from 790+ to below 770 (-2.5%) then closing today at 774 (-2%). SDP, the thinly traded 2x inverse ETF for utes rallies more than +3% over the last four days.