The Utilities Sector gets stronger

XLU – the Utilities Select Sector SPDR Fund – is considered a conservative Sector that traders prefer when there is uncertainty in the market.

For about a month, XLU moved in a range defined by the blue box. Within this range, though, XLU formed a triple bottom pattern, the first outside the lower Bollinger Band and the other two above it. This is considered a bullish pattern by John Bollinger, the creator of Bollinger Bands.

The last time XLU tested the 20- day exponential moving average support line, it reacted with a series of bullish candlesticks that moved price above its 10- day exponential moving average and just below an ascending upper Bollinger Band.

The momentum buildup is evident in MACD, which moves above its signal line and diverges from it.

Finally, after some time, the Relative Strength of XLU moved above its 20- day exponential moving average as an additional verification of the Fund’s strength.