Utilities ETF (XLU) hits lower rail of upwardly sloped channel and gets a bullish signal
The utilities sector is often viewed as a safety sector, offering less risk than the more cyclical sectors. With the overall market moving higher over the last three weeks, utilities have lagged the other sectors. The Utilities Select Sector SPDR (NYSE: XLU) has dropped 1.3% since July 8 and that is the worst performance among the 10 main sector SPDRs.
While the XLU has lagged in the last few weeks, the slight decline has allowed a couple of trend lines to catch up to the fund. The first one is the 50-day moving average and the ETF just hit it in the last few days. The second trend line is actually the lower rail of an upwardly sloped channel. We see that the line connects the lows from May and June while the upper rail connects the highs from April, May, and June.
When the XLU dropped to its low on May 9 that formed the first point of the lower rail and the fund jumped over 6% in just over two weeks. The second point that helped form the lower rail was on June 4 and after hitting that low the fund jumped 5.87% in three trading days.
The Tickeron Trend Prediction Engine generated a bullish signal for the XLU on July 25 and the signal showed a confidence level of 84%. The signal calls for a gain of at least 4% within the next month. Past predictions on the XLU have been successful 90% of the time.
From a fundamental standpoint, utilities may become more attractive as it appears as if the Fed will cut rates at the July meeting. When the Fed cuts rates, utility stocks become more attractive for the yields the dividends provide.
XLU in upward trend: price rose above 50-day moving average on June 23, 2026
XLU moved above its 50-day moving average on June 23, 2026 date and that indicates a change from a downward trend to an upward trend. In of 48 similar past instances, the stock price increased further within the following month. The odds of a continued upward trend are .
Technical Analysis (Indicators)
Bullish Trend Analysis
The Moving Average Convergence Divergence (MACD) for XLU just turned positive on June 11, 2026. Looking at past instances where XLU's MACD turned positive, the stock continued to rise in of 41 cases over the following month. The odds of a continued upward trend are .
The 10-day moving average for XLU crossed bullishly above the 50-day moving average on June 26, 2026. This indicates that the trend has shifted higher and could be considered a buy signal. In of 19 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where XLU advanced for three days, in of 342 cases, the price rose further within the following month. The odds of a continued upward trend are .
The Aroon Indicator entered an Uptrend today. In of 345 cases where XLU Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .
Bearish Trend Analysis
The 10-day RSI Indicator for XLU moved out of overbought territory on June 29, 2026. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 34 similar instances where the indicator moved out of overbought territory. In of the 34 cases, the stock moved lower in the following days. This puts the odds of a move lower at .
The Stochastic Oscillator may be shifting from an upward trend to a downward trend. In of 67 cases where XLU's Stochastic Oscillator exited the overbought zone, the price fell further within the following month. The odds of a continued downward trend are .
The Momentum Indicator moved below the 0 level on July 09, 2026. You may want to consider selling the stock, shorting the stock, or exploring put options on XLU as a result. In of 87 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where XLU declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
XLU broke above its upper Bollinger Band on June 24, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
Notable companies
Industry description
Market Cap
High and low price notable news
Volume
Fundamental Analysis Ratings
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
Advertisement
General Information
Category Utilities
Advertisement