Utilities continue to look less appealing with safer U.S. Treasury yields rising, and technicals show Treasurys yields will probably keep rising. Two weeks ago the Dow Utility Average had a positive but overbought weekly chart. Since then, utilities have had a momentum power-outage and last week's close was technically negative. This should not be a surprise to investors who follow my coverage of utilities. On Jan. 16 I wrote How to Trade: Book Profits on Utilities, Then Buy These 5 Dividend Stocks.
The main reason for weakness in utilities is the rise in longer-term U.S. Treasury yields. Yields have been rising since the end of January, making a 3% dividend yield on the Utility Sector ETF no longer compelling. The U.S. 10-year Treasury yield (2.030%) traded as low as 1.637% on Jan. 30 and tested its 50-day simple moving average at 2.019%. The 200-day simple moving average is a key support at 2.356%. The weekly chart will favor higher 10-Year yields given a close on Friday above its key weekly moving average at 1.977%.
Source: The Street
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Investors Pull the Plug on Utilities as US Treasury Yields Rise
Posted by D4L | Thursday, March 26, 2015 | ArticleLinks | 0 comments »________________________________________________________________
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