On February 10th, we outlined our seasonal strategy for Utility sector during February. As of close on February 28th, two of the ETFs have generated entry signals.
- Go long XLU – Utilities Select Sector SPDR ETF – at or near 40.45, the close on Feb 28th
- Go long IDU – iShares US Utilities ETF – at or around 101.61
Since 2000, XLU trade were successful 71% of times for 4.6% average gain within 50 calendar days resulting in 34% annualized return. IDU had 69% success rate, 4.7% average gain and a holding period of 47 calendar days giving an annualized rate of 36%.
There are two more potential trades within this sector – First Trust Utilities AlphaDEX (FXU) and Guggenheim S&P 500 Eq Weight Utilities (RYU). We will send alerts when these trades are initiated.