Utilities stocks have been electric, making gains for six straight days and hitting a two-month high. However, one technician says that investors shouldn't get too optimistic on the outlook.
"Utilities should be viewed as a summer rental here, let's not fall in love," Rich Ross of Evercore ISI said Friday on CNBC's "Power Lunch." "It's been constructive here in the short term, but tons of resistance comes right overhead."
According to Ross' chart, the SPDR Utilities Sector ETF (XLU) has seen a pullback this year to a key support level of $40. Although the XLU has followed an upward trend in its 150-week moving average since 2011, Ross said that could turn around quickly, as investors bet the Federal Reserve will raise rates later this year.
"As long as we continue to hold that key long-term moving average, the big trend does remain higher. But let's keep those expectations in check," Ross said.