Karpel’s Corner: The Quest for Yield Picks Up, Utilities on the Radar

Welcome to Karpel’s Corner. This is where I throw out my thoughts on the markets and share some of my favorite strategies. I keep it market-focused, and never miss an opportunity to teach trading strategies and commentate on the latest trends affecting the financial markets. Hope you enjoy today’s post!

The Quest for Yield has picked up and utilities ($XLU) is the beneficiary. Utilities led into the summer months on the upside advance of the market. But in July, $XLU dropped from it’s 52-week high of $44. After the ETF sliced through the 50-week moving average, it found the lows of $40 by August. Now $XLU has challenged the 50-week mid-term moving average, attempting to break $42. If this sector ETF can break and hold the $42 level, it would be a bullish signal.

I want to put a few names on the radar that have a short-term rating of 8, and look poised to pop from a neutral buy rating of 5. Duke Energy ($DUK) and Southern Co. ($SO) are two to watch. We have seen the telecoms hold up as well–the most notable being Verizon ($VZ), the highest-rated telecom stock on the radar. AT&T ($T) and Apple ($AAPL) have also held up well, and have earned our highest buy rating of 10 in the computer sector. Keep an eye on Apple to signal the next move in the tech sector.

We have a great webinar scheduled today at Noon, CST, that will cover a Tradespoon pick of the week. My good friend Joe Cusick from Trading Block will discuss the Greeks associated with these trades.

See you next time at the Corner!