Even in a topsy-turvy market, there are always winners and losers. But in the case of this week’s market action: there are losers and there are even bigger losers.
Utilities, normally considered a safe haven for investors, have struggled more than most sectors this year. The Vanguard Utilities ETF (VPU) was down 9% year-to-date as of Thursday, while the S&P 500 has lost a comparably tame 3.5%.
And although utilities had enjoyed a 4% run for much of August, utilities collectively ran off a cliff during the market meltdown.
Perhaps investors viewed utilities as an easy source of funds during the big selloff, as even during late August’s rebound, many utilities are still looking pretty ugly.
Here are three such stocks for which the Profit Scanner, powered by Recognia, has spotted significant bearish signals.
Utilities to Avoid: PPL Corp (PPL)
On Monday, PPL gapped down and suffered a few short-term bearish signals, including a cross below the 21-day moving average.
No big surprise, given the 4% market sell-off. But then, on Tuesday, PPL also crossed below its 50-day MA — a longer-term bearish signal. And on Wednesday, PPL’s short-term Know Sure Thing turned bearish as well.
The KST is essentially a momentum indicator, and the fact that PPL suffered bearish momentum on a day that the market was staging a tentative rebound is certainly nothing for investors to cheer about.
Utilities to Avoid: Black Hills Corp (BKH)
BKH has put in a series of bearish signals since last Friday, including a break below the 21-day MA on Monday, and a bearish triple moving average crossover on Wednesday.
In this technical event, a faster MA crosses below an intermediate-term one, which in turn crosses below a slower one.
In BKH’s case, the four-day MA crossed below the nine-day MA, which crossed below the 18-day MA — a compelling short-term bearish signal.
Utilities to Avoid: Atmos Energy Corporation (ATO)
Last Friday wasn’t a great day for the market, you’ll recall, and it certainly wasn’t a good day for ATO, either — ATO stock put in three short-term bearish signals.
However, on Monday things were starting to look up, at least from a technical standpoint. ATO’s chart displayed a bullish Key Reversal Bar.
But, sure enough, Tuesday and Wednesday brought more bad news for ATO investors. The momentum indicator turned red, followed by the short-term KST. The takeaway here is that ATO is in a weak trend, despite the rest of the market showing signs of life.
Profit Scanner powered by Recognia can help traders of all levels uncover these signals to determine the best timing to buy. Or use Profit Scanner’s technical insight to validate your own trading ideas. See how easy this powerful tool is to help you uncover hidden opportunities in the market.
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