Each year, traders try to navigate their way through the financial market and turn a profit. This year, getting out early might be the best bet. Stocks will start to struggle as indexes test new highs and key resistance levels. The good news is that when money is flowing out of one investment it typically flows into another, which provides us with an opportunity to make money.
Risk capital has been flowing into stocks recently but with the stock market over-bought on a short term basis, traders will start to move to specific sectors within the market to protect their capital.
Utilities have been under-performing all year and are not being talked about by anyone. This is a contrarian signal; utilities will likely become the sector of choice as fear creeps into the minds of market participants.
The chart below shows price of this sector is trading at the key 200 day moving average which should provide support. The bullish chart pattern is pointing to higher prices.
'Tis The Season For Utilities!
The chart below clearly shows where price is trading today and what is likely to happen over the next 2-3 weeks as we enter May.
U.S. equities continue to be in a long term bull market. It is best to remain net long stocks, as the odds of a trend continuing is more likely than not.
This is just one of many ways to play the market between now and the first week of May.
This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.