Utililities Are Back Near All Time Highs – Buy These Two

• Posted by Greg Harmon
• on May 1st, 2012

The Utilities Select Sector SPDR, $XLU, touched its four year high from December today at 35.94. And it has great technical support. The Relative Strength Index (RSI) is bullish and rising and the Moving Average Convergence Divergence (MACD) indicator is positive and increasing. The volume is increasing as it rises and the Bollinger bands opening to allow a run higher. With a strong

Utilities Select Sector SPDR, $XLU

backdrop like this it is worth looking for plays in a sector that is about to break to new highs. Two of my favorites, First Energy, $FE, and Hawaiian Electric Industries, $HE, have been leading the charge. Take a look.

First Energy, $FE

First Energy, $FE, a local favorite, just down the road in Akron, broke above an ascending triangle in March for what looked like a failed break out. After a brief pullback though it has rallied hard higher. The target on the break is a price of 53, still plenty of upside and a 4.70% fat dividend while you ride it. Look to 46 as a stop.

Hawaiian Electric Industries, $HE

Hawaiian Electric Industries, $HE, the power company for where I would rather live, also sports a 4.7% dividend. This chart shows a long run up from the August 2011 low to a consolidation zone shown in blue. Breaking above that zone in the middle of April it is running higher with a target on the pattern to 30, also still a good ways higher. Use a stop at 26.00 on this one.

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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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