On the Brink of a Catch-Up

For those seeking shelter from this "face off" and "face on" market, the utility sector continues to be a safe harbor. Great Plains Energy (GXP) is a Missouri-based electric utility that has a 4.2% dividend yield and a 6.5% short interest, and is breaking above channel resistance. The stock price has lagged the Utilities Select Sector SPDR (XLU) by 12.75% over the last year and 8% year to date -- and, on a technical level, the stock is positioned to play catch-up.

Great Plains Energy (GXP) and XLU -- Weekly Source: StockCharts.com View Chart » View in New Window »

The weekly chart shows the uptrend in the XLU since the beginning of the year, and the divergence in Great Plains Energy's price action. Over the last three months, however, the stock has traded sideways in a narrow channel, and last week it broke above resistance. The relative strength index is moving above its centerline and its 21-period signal average, and moving average convergence-divergence is making a bullish crossover above its centerline. Overall volume has not supported the breakout, but the Chaikin oscillator -- a measure of three- and 10-day accumulation-distribution -- continues to track above its signal line....194 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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