Utilities: A Contrarian Play

January 09, 2014

By Knowledge Leaders Team in Uncategorized

One of the ways we assess the technical strength or weakness of various areas of the stock market is by measuring the percent of stocks above a 200 day moving average. When 80% of stocks are above their 200 day moving average, we consider this to be a symptom of an overbought market, and when only 20% of stocks are above their moving average, we consider this to be a symptom of an oversold market. When we divide out all the region-sectors within the MSCI World index, there are only two that grab our attention as being oversold–North American and Asia-Pacific Utilities.

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