U.S. utilities shares face resistance as October rally tests scope for further gains

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U.S. utilities shares rally

Highlights

The S&P 500 utilities sector index faces key resistance at 435.53–439, with a decisive break targeting the 200-day moving average near 449.
Initial support lies at 429.62, with major downside risks triggered by a drop below 419.36, potentially extending losses to the 408.53–408.25 area.
A decline toward the late-September low of 396.77 and the 390–387 region would approach bear-market territory, implying a 20%+ drop from recent highs.

Key chart levels shape the next move

As reported by Reuters, the S&P 500 utilities sector index is approaching a cluster of resistance levels that traders are watching closely for signs of a broader breakout.

Last Thursday's high stood at 435.53 and Tuesday's high reached 435.75, based on LSEG data. Those levels align closely with the June 1 low at 435.93, while a Fibonacci retracement sits near 437.47 and the 100-day moving average is around 439.

If the index moves decisively above that area, the next upside target is the 200-day moving average near 449. Technical analysts use such levels to identify where buying momentum may strengthen or stall.

These signals draw on common charting tools including support and resistance, Fibonacci retracements, price gaps and moving averages. Together, they help map possible price paths after sharp market swings.

Downside risks remain below support bands

If the sector fails to clear resistance, attention shifts to support levels that could determine whether the October rebound loses force.

Initial support is at the October 16 high of 429.62, followed by 422.86, another Fibonacci retracement. The October 19 low at 419.36 is also a key threshold, and a break below that area could redirect focus to the October 6 price gap near 408.53, almost matching a 61.8% Fibonacci retracement at 408.25.

A drop through that zone would put the late-September low of 396.77 back in view and raise the risk of a test of the 390 to 387 area. Such a move would leave utilities close to bear-market territory, commonly defined as a decline of 20% or more from a recent peak.

In our earlier analysis of the S&P 500 (SPX), we highlighted how the index was holding above key moving averages while momentum indicators were turning mixed and downside risks were starting to build. We also noted that risk-off flows, triggered by weakness in mega-cap tech after Meta’s negative free cash flow, could keep price action defensive, with traders watching a near-term consolidation band for the next directional break.

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