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A relief rally could be coming soon for these stocks getting hurt by higher rates, says Katie Stockton
CNBC • • business
Key Points:
- The percentage of S&P 500 stocks above their 50-day moving averages has declined to levels not seen since Q1, indicating oversold breadth and a potential short-term recovery, especially benefiting interest rate-sensitive sectors like utilities.
- Utility stocks show signs of short-term downside exhaustion based on DeMARK Indicators, with oversold conditions suggesting a likely relief rally in the coming weeks.
- The PHLX Utility Sector relative to the S&P 500 is near the bottom of its Bollinger Band, indicating expected relative stabilization and potential rotation back into favor for utilities.
- Specific utility stocks such as American Electric Power (AEP) and Atmos Energy (ATO) are oversold near key support levels and present compelling risk-reward setups with upside potential above 6% to their 50-day moving averages.
- The analysis is based on technical indicators and does not constitute financial advice; investors should consult their own advisors before making investment decisions.
