Did utilities see the yield peak coming?
XLU•Utilities rebounded more than 9% after the 10-year Treasury yield retreated below 5%, following a decline of more than 17% from their February record high. The sector has posted four straight weekly gains but remains about 10.5% below its record close.
1. Utilities rebound
The S&P 500 utilities sector fell more than 17% from its February 27 record closing high to its September 28 low, then rallied more than 9% through last Thursday as the 10-year Treasury yield retreated below 5%. Utilities bottomed about a week before the yield reached 5.3645% on October 7, its highest level since 2002. The sector has posted four consecutive weekly gains and remains about 10.5% below its record close.
2. Key technical levels
The sector's rebound is approaching resistance near 435.93, 437.47 and its 100-day and 200-day moving averages, around 440 and 449. Support is near 422.86 and 419.36; a break below 419.36 could put levels near 408 and then the late-September low of 396.77 back in focus.
