Utilities continuing to gain strength and one of the top sectors to own right now.
While many continue to try to buy dips in Technology, (and I do think this can work well over the next couple weeks) the “Utes” have become a real leadership group which I think sends a real message as to the pick up in defensive relative strength we’ve seen since February.
Multi-Utilities index as a group is up over 7% over the last month, the second best sub-sector behind Health care providers, while Electric Utilities is also higher by nearly 5%.
Stocks like LNT, as part of the Focus list remain very good, and others like DTE, PEG, DUK among others which all lie within 5% of 52-week highs and acting very well technically. This chart above of the XLU has broken its prior downtrend and now pushing up to test former highs from mid-March which shouldn’t pose too much of a problem. I expect this is exceeded and can lead up to 64-65 without too much trouble. Overall, for those who have been stung by the growth trade and looking to diversify a bit, this group has appeal and should be favored in the weeks and months ahead as an intermediate-term source of strength.
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Author has positions in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.