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.
The Utilities SPDR ETF (XLU) was unchanged in premarket trading Thursday. Year-to-date, XLU has declined -3.68%, versus a 2.72% rise in the benchmark S&P 500 index during the same period.
This article is brought to you courtesy of Kimble Charting Solutions.