Copper prices have had quite a busy few weeks. In fact, we most recently wrote about copper putting in quite a historic green day as President Trump first mentioned the metal could be exempt from possible tariff implementation. Most recently, Copper cratered to pre-summer levels after it was announced that raw “input” materials (unrefined copper) would be exempt from tariffs, while other goods (copper wiring, pipes, etc.) wouldn’t be as lucky. On the news, HG/ slipped over 20%... its worst day ever dating back to mid-1989. As you may expect, this coincided with the metal moving back into a negative trend on its default PnF chart.

Wednesday’s featured article talked about a lack of defined leadership within a weakening commodity group. Gold and crude oil were the focus of that article, lacking commentary on industrial metals which have struggled to earn prolonged group-wide relative strength against other parts of the asset class. The historic decline for Copper does little to help that case as we open August, with representative CPER showing relative weakness against domestic benchmark SPXEWI. The fund returned to a sell signal on its respective 3.25% RS chart, its first since November of last year.

Another important relationship is between Copper and Gold. In the last copper focused article, we highlighted the fact that despite the overall risk-on market environment so far in 2025, GLD has maintained a string of buy signals against CPER due to its intense strength over the last few years. With this week’s move, CPER posted its third consecutive sell signal against GLD on its 3.25% RS chart, matching relative lows dating back to March of 2020. That was, of course, the start of an intense rally as the world re-opened from the pandemic… a catalyst not present in the current situation. Regardless, following RS signals for this relationship has been quite additive since the early 90’s, and the continued relative dominance from gold is quite notable despite its recent consolidation.

For those of you with exposure to copper, continue to exercise caution. In a similar fashion to our advance after a historic up day for HG/ post tariff announcement, normalization could be in store as many names find themselves in oversold territory. The move lower also confirms recent commentary that commodities are a group lacking defined price leadership. Also know that the space will undoubtedly be a group driven in the near-term by headlines, making it easy to get caught up in a tariff guessing game… 

Domestic Equity indices capped off the first month of Q3 positively with the Nasdaq Composite (NASD) leading the way, up 3.70%, while the S&P 500 (SPX) added 2.17%. With indices pushing the new highs during July, the usual culprits – Technology and the Magnificent Seven, along with other risk-on sectors – took much of the limelight. Intriguingly enough, Thursday’s action (7/31) wrapped with Utilities finishing July as the best performing sector, both on the cap or equal weighted front. Year-to-date, Utilities checks in as the best performing sector within the Invesco Equal Weighted lineup and second best within the cap weighted SPDRs lineup.

Within the NDW DALI Sector Rankings, Utilities have ranked 5^th or higher within the rankings (out of 11) since the beginning of March. On the Asset Class Scores page, confirmation of the sector’s strength is found as the group has scored above 4 (out of 6) for much of the past 12 months.

Positive action during this week’s trading was assisted by the first major week (of two) of earnings within the sector. While some stocks rallied to overbought positioning on earnings, others provided further positive technical developments.

The lists below were developed by utilizing the Security Screener on the NDW Platform and highlight high technical attribute optionable stocks within Utilities; separating them into two groups – ones to watch and ones that are actionable based on their current technical picture. Note that stocks that have yet to report earnings are highlighted in blue, and potential exposure to these names should be assessed post-earnings. Examples from both lists are discussed below.

American Electric Power (AEP) – Electric Utilities – AEP rallied to a new all-time chart high at $114 Wednesday (7/30) after beating expectations and backing its full-year guidance. Prior to the rallying this week, AEP returned to a buy signal and moved back into a positive trend during last week’s trading, increasing the stock up to a 3 for 5’er. The stock maintains near-term relative strength versus the market and peer group, while ranking within the top third of the Electric Utilities sector matrix. Considering this week’s action brought the stock into overbought territory, those seeking exposure are best served by looking for a pullback to the mid to upper $100 range before considering. Initial support lies at $98, the bullish support line and a level the stock held back in May. Year-to-date, AEP is up 22% (through 7/31) and currently maintains a yield of roughly 3.3%.

As noted with AEP, stocks within the list shown above have rallied into overbought territory, and exposure to these stocks would be better considered on a pullback or following a period of price consolidation allowing the 10-week trading band to normalize.

Southern Company (SO) – Electric Utilities – While net income was light relative to a year ago, Southern beat on earnings and affirmed its full-year guidance after reporting earnings after Thursday (7/31). Ultimately, SO reversed into Os at $93 before rebounding into Thursday’s close, pulling the stock back from its all-time high reached on 7/22 at $96. SO has maintained at least a 3 technical attribute rating since April 2024, moving up to its current attribute rating of 4 after returning to a buy signal and shifting back into a positive trend to kick off July. From a relative perspective, SO has maintained a long-term market RS buy signal since March 2020 and currently ranks within the top third of the Electric Utilities sector matrix. Those seeking exposure to the stock can consider so here on a pullback as well as in the lower $90 range. Prior resistance at $93 and $91 may be seen as near-term levels of support, while additional may be found in the $88 to $89 range. Year-to-date, SO is up 14% (through 7/31) and currently maintains a yield of 3.1%.

As noted prior, the stocks shown within this list are action based on their current technical picture. While some have reported already, those stocks that have yet to report should be evaluated post-earnings. For further questions pertaining to today’s piece or the Utilities sector, reach out to david.clark@nasdaq.com.

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