Utilities had a blow-off top signal trigger on the recent rally. It was similar to pops in 2022. Two are on the index, and there were actually three on XLU. The year 2020 also had a similar setup, but I don’t think that’s an analog…at least as long as rates aren’t being cut.
If the expected move based on those more recent rallies and reversals plays out similarly (corrections ranged from 10 to 20 percent), it could test channel support that goes back to 2003.
