Apart from my sense that the Obama Administration is pro-energy efficiency, conservation, and "alternative," all of which implies a potential increase in electricity usage and production during the next 4-8 years, the technical set-up in the SPDR Select Utility ETF (XLU) is very constructive.

Although the messy pattern in the XLU off of the October 10 low at 23.28 is not an obviously bullish pattern, my pattern work argues that the price structure needs to make another run at the January recovery high at 30.47, and possibly towards a new recovery high into the 31.50 area -- prior to a resumption of intermediate-term downtrend weakness. Today's strength supports such a scenario, which has propelled the XLU to the upside from its upturning 20-day and 50-day moving averages.

Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com, a real-time diary of his technical chart analysis and trading alerts on all major markets. For more of Mike Paulenoff, sign up for a free 15-Day trial to his MPTrader Diary by clicking here.