The utilities sector is often viewed as a "safe haven" trade, but the decline of the Utilities Select Sector SPDR ETF ( XLU) since early September is changing that perception. Let's check out the charts and indicators and see what's going on with the "Utes."
In the daily bar chart of the XLU, below, we can see a number of downside pullbacks or corrections but the decline that began in early September is the biggest decline to date. Prices are trading below the declining 50-day moving average line and below the declining 200-day line. This is the first time that the slope of the 200-day moving average line has been negative in the past 12 months and it represents an important change in direction.
The On-Balance-Volume (OBV) line has weakened in the past six weeks and it is close to its June nadir. A weak OBV line tells us that sellers of XLU are more aggressive than buyers. The Moving Average Convergence Divergence (MACD) oscillator is bearish but we may soon get a cover shorts buy signal. 
In the weekly Japanese candlestick chart of XLU, below, we can see the price action of the past three years. Prices show a pattern of higher lows (and highs) the past two years or so but that pattern was broken with the recent September-October decline. XLU is trading below the declining 40-week moving average line.
The weekly OBV line has been weak since December. The weekly MACD oscillator is below the zero line and bearish.
In this daily Point and Figure chart of the XLU, below, we can see a potential downside price target in the $54 area.
In this weekly Point and Figure chart of the XLU, below, we can see a still lower price target in the $44 area.
Bottom-line strategy: I have no strong ideas on why the utilities sector has been so weak lately but I am not going to argue with the charts, which are pointed lower. Avoid the long side of the XLU.
