Utilities ETF XLU has had a rough go of it the past two months! Below compares XLU to the S&P 500 over the past year-
Sometimes Utilities are viewed as interest-sensitive assets. XLU was keeping pace with the S&P over the past year (sometimes ahead) until mid-November last year, where they started heading south, backing off nearly 10% from highs.
Below looks at the chart of XLU over the past 18-years-
The recent softness in XLU is testing 9-year rising support at (2) above. Support is support until broken.
If XLU breaks support at (2), selling pressure could take place in this sector and they could be sending a message that interest rates could be moving higher.
Chart pattern analysis with brief commentary:
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