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By Mike Paulenoff, www.MPTrader.com
Apart from my sense that the Obama Administration is pro-energy efficiency, conservation, and "alternative," all of which implies a potential increase in electricity usage and production during the next 4-8 years, the technical set-up in the SPDR Select Utility ETF (AMEX: XLU) is very constructive. Although the messy pattern in the XLU off of the October 10 low at 23.28 is not an obviously bullish pattern, my pattern work argues that the price structure "needs" to make another run at the January recovery high at 30.47 -- and possibly towards a new recovery high into the 31.50 area -- prior to a resumption of intermediate-term downtrend weakness. Today's strength supports such a scenario, which has propelled the XLU to the upside from its upturning 20 and 50 DMAs.
Mike Paulenoff is author of www.MPTrader.com, a real-time diary of his technical analysis & trade alerts on ETFs for precious metals, energy, currencies, and an array of equity indices and sectors, including international markets, plus key ETF component stocks in sectors like technology, mining, and banking. Sign up for a Free 15-day Trial!
