What is the relationship between Artificial Intelligence and utilities, and how can we benefit from it?

The shift in the positioning of traders from the technology sector to the defensive Utilities at first glance looks like a risk off positioning before the summer season.
-Beneath the surface, however, the long arm of AI Hype shines through again – as the utility sector stands to benefit greatly from the integration of AI as energy consumption rises.

The strong rally in Nvidia’s price since Q1 faded shows that Wall Street still remains focused on AI, but investors are increasingly looking to expand exposure to artificial intelligence.
-Hedge funds are increasing their exposure to the infrastructure and utilities sub-industries, reducing their strong concentration in semiconductors

This is what the graphs also show.
-Traders who chose the approach of investing in the first quintile /top 5 stocks/ of the Utilities sector were rewarded with 33% growth in the current year.
-Momentum has accelerated over the past 12 weeks, with the energy and utilities sectors moving from laggards to leaders.

The expected in 2024 revenue growth for the Utilities sector was 12.4%, making it among the top four sectors in the SP500 (the others being Communications Services, Information Technology and Consumer Discretionary).

The one-month sector performance in the SP500 also shows the correlation between the technology, communications and utilities sectors, which are all three of the best performing sectors.
-the 3 sectors make up the complete cocktail for AI – from infrastructure, to provisioning and distribution and.

The Utilities sector is also suitable for more conservative traders and investors looking for lower volatility in a scenario where the Fed keeps rates high significantly longer than current expectations.

-For traders who do not want to do separate stock picking in the utilities sector, broad exposure to the entire Utilities sector is one option to take advantage of the current trend. This can be done through XLU /ETF tracking the utilities sector/

What levels will we be watching for XLU purchases
XLU – Daily Chart
-Long Trend with impulse extension after the breakout of the main Short Trend Resist Line /$64 levels/
-DeMarker Oscillator in neutral territory, heading aggressively towards the oversold border
-Sequential in descending printing
-7 on TD MegaP
-Below-average volumes on corrective momentum, suggesting weak selling interest.

Currently, the trade is still at the top of the Long Trend channel, far from its averages, and the technique does not suggest entering a trade from current levels.
-First level of price support is in the area around $68.5 /23.6FIBO/. On a Bounce and close below them, the corrective momentum will accelerate towards the $66 levels where we have a build-up of multiple supports and look for Long Entry opportunities.
Alternatively: Bounce Back from 23.6FIBO will send the trade back to the 72.90 levels at the top of the trend channel.

XLU CAN BE TRADED ON THE VARCHEV ABSOLUTE TRADER PLATFORM