Get started

Utilities

US SECTOR SERIES FINALE 11/11: UTILITIES(XLU)+ESSENTIAL TA NOTESSERIES FINALE ; Episode 11/11 : US (SPX) Sectors Technical Analysis Series - 31st of July 2019 (4 Minute Read) Since this is the Series Finale I will try to holistically summarize the whole series of 11 Episodes on all the US sectors. The essential notes from this chart are the following(also included in the comments) : 1 . Compared to the previous expansion of 2002-2007 ; the current expansion of US Utilities has yielded a much slower growth . This can be seen from the chart as the current bullish channel is at the bottom range of the pitchfork. Despite this fact, the volume has kept growing continuously from which statement several indications can be derived. To keep it simple and as obviously as it can be, a good portion of the volume growth can be attributed to the funds flow from asset classes that are based on inflation( pension funds, real estate, fixed income securities etc etc ) into equities characterised as defensive as part of XLU, XLP, XLV . 2 . From the cycle lines it can be seen that we narrowly escaped a recession in 2015-2016 . However, I do not think that this will be the case come by the next drop in the cycle circa-2021. Fundamentally, due to the low global growth that dominated the 2015-2016 correction particularly in the emerging markets-in effect due to President Trump the cycle extended . Despite my disagreement with his absurd trade and tax policies , I have to give credit where credit is due. Now at the same time, I do not think that a cycle extension is necessarily good; in a way it means that the fundamental & structural issues that develop in the economy during an expansion continue to build up even more. The higher it tops= the lower it will bottom (% wise). 3 . Elections 2020 , US/China trade deal and Brexit will dominate the negative momentum in the upcoming months and years. Global growth has slowed down quite a bit and it's way overdue for a recession. In fact, past June 2019, we have been in the longest expansion on record, lasting more than 10 years(122 months now). Regarding the key takeaways from the XLU chart are all labelled above: structural supports, channel supports and bullish targets . I do not see a need to continually repeat myself . Make sure to check out the comments for detailed indicator analysis. This episode concludes the show . Hope you enjoyed it- I certainly did. This is just a brief "free" and very detailed analysis. Perhaps in the future I might form a premium group, to whose members I will provide all the details of my research. For any use of this show for references to any corporations or individuals that get inspired from my ideas, I'd appreciate it I am being given credit for my efforts . >>I do not share my ideas for the likes or the views. This channel is only dedicated to well informed research and other noteworthy and interesting market stories.>> However, if you'd like to support me and get informed in the greatest of details, every thumbs up or follow is greatly appreciated ! Step_Ahead_oftheMarket- Make sure to check all the previous episodes on the US Sectors for more holistic understanding : EPISODE 10 : US COMMUNICATIONS ( XLC ) EPISODE 9 : US REAL ESTATE ( XLRE ) Full Disclosure: This is just an opinion, you decide what to do with your own money. For any further references- contact me through any of my channels.
AMEX:XLUShort
by step_ahead_ofthemarket
2
XLU rises after consolidation periodsUtilities are defensive and traditionally do well in summer, when risk stocks suffer from ‘Sell in May’. In the last six consolidations, which often start around May, the price moves up after the consolidation ends. Overall, the ETF has followed a clear parallel channel for four years now, and it is affected much less by macro events. Each consolidation has been followed by a rise of around 6.7% so an entry at 58 (.30 below current), with a stop of 56.50 (below the consolidation low and the lower current channel (in red, I have treated Xmas 2018 as an outlier), and a target of 62.50 (where the upper channel will be on Oct 31, traditionally the end of the summer season neatly gives a 3:1 trade to run for six months. Not the most exciting of trades, but safer than most.
AMEX:XLULong
by adatherton
Why you buy Utilities in a slowing growth environmentUtilities have started to outperform, meanwhile other sectors are underperforming. Just looking at history, you only have to go back to 2015-2016's industrial mini recession and EM recession to see how utilities outperformed other sectors. During this time, $XLU rose 25% while the S&P was flat, and technology / other cyclicals were all negative. Cyclical sectors had their time, now utilities get to shine as other sectors get hit hard.
AMEX:XLU
by GTStockmaster
Overweight in Utilities & InfrastructureI like investing in utilities. More importantly I like investing in utilities with the type of infrastructure I consider to be a staple of domestic life. What do I mean? Water Utilities ( CWT @ 1.61% Yield) Waste Utilities ( WM @ 1.92% Yield) Recycling Utilities ( RSG @ 2.02% Yield) Power ( NRG @ 0.44%) Why? It certainly does make me feel good. Its easy to hold on to long term investments when you're rather certain you're doing the right thing (NRG is heavy renewables). We know pretty quickly that the suburban life of city dwellers is greatly dependent on the services which these types of companies provide. Anyone more familiar with these types of companies know that their services are typically maintained and required by small and large business alike, with residential subscriptions being the smaller portion. Cities, Housing developments, Contractors, Builders, Military, and Retail stores all utilize these services. Others do as well, but an exhaustive list would certainly take too long. Why is the future brighter than the past? The U.S. is amidst a budget constraint, and is fighting for every penny in order to stay open. Amongst the items up for discussion are Immigration, Border Protection, National Security, and certainly others are sneaking in as well. One item which has been on the docket for a long time and has met little debate. Infrastructure Spending. This is the item investors should be paying attention to. This market is pricing in more and more premium on Technology returns. Biomed's continue to be strong, and energy has been untrustworthy up to this point. The one area that continues to pump aggressive dividends, and is growing at an astounding rate, is municipal use utilities. Today we take a look at the chart of Waste Management (A waste water, trash collection, and recycling company) compared with FIW an ETF made up of Water Utilities, and measure their performance vs. the S&P 500. The results certainly warrant a look at the "boring" "safe" "low return" investment in these sectors. Longs must maintain Discipline. While I am bullish on this industry, and I do believe these sectors offer great protection from corrections in the current market - I also must exercise caution. A pullback makes complete sense. From a technical standpoint we can see the WM and FIW cycle has pullbacks that retrace to the previous fractal, before extending to touch. I doubt that pattern will break here. We also see that we are moving towards a fibonacci resistance arc. It's only a matter of time before WM (and FIW for that matter) touch resistance. Why is this important? This is important because we must maintain our discipline. We must remember to rebalance our portfolio. We should be slowly selling off and taking gains, and if you're like me - waiting for the pullback. I typically like to do so after getting dividends (these stocks are great dividend payers) and so you will need to do some fundamental analysis on your portfolio's balance in that regard. Recommendation: Set a series of trailing stops. One for 10%, another for 40% and finally 50% of your position. The idea being to exit in waves in case of corrections of varying scales. Perhaps 10% on a 5% retrace. 40% on a 20% retrace. 50% on a 35% retrace. This can protect your investment, and help you slowly exit from a product. It keeps you nimble, and can help re-balance your portfolio. HOMEWORK IDEA: When rebalancing take a look at reinvesting a portion into the same sector albeit, in another market. Research VEOEY, a European company which ALSO participates in the US Domestic market, and meets many of the criteria of these other securities. By doing this, you will slowly diversify your portfolio into more markets as you continue to build a robust investment in a sector. Thanks for reading!
NYSE:WMLong
by blessmywork