Friday, May 16, 2014

Corporate High Yield Bond Fund (NHINX) Faces Resistance

As outlined in our April 30, 2014 post, corporate high yield bond fund NHINX broke through the overhead falling resistance line labeled R4 in the chart below (note: labeled R1 in the previous post). In our view, this was a positive development for this fund (and high yield bonds in general).

Now it appears that NHINX faces a series of slightly rising resistance lines R1, R2, and R3, as shown below.  At the same time, NHINX appears to be at or near slightly overbought conditions based on the RSI (upper part of chart).

(Click Chart To Enlarge)

NHINX chart: 5yr | daily | semi-log | unadjusted prices

Looking forward, over the short-term, as long as support line S2 continues to hold, we would not be surprised to see largely sideways movement (i.e., between S2 and R1) in NHINX's price. 

Assuming sideways movement, we will be interested to see how NHINX's trend relative to overhead resistance (R1, R2, and R3) if/when rising support line S1 comes into play again (intersects and rises above S2). 

S1 has acted as a key price support line where buyers have stepped in, ensuring higher lows (reaction points), since late 2011.  If S1 continues to act as support, NHINX's price will continue to rise.

Not Investment Advice | Important Disclaimer: 
The content in this article, including the identification and discussion of any specific security (e.g., bond fund), is NOT meant to be and should NOT be construed and/or used as investment advice. This article is for general information and educational purposes only. Please read the Disclaimers  for in their entirety. The U.S. Securities and Exchange Commission website has guidance on selecting an investment adviser.

Financial Disclosure:
The author/publisher holds positions in NHINX and other corporate high yield bond funds.

Base Chart Provided Courtesy of  Analysis and Annotation by (All Rights Reserved)

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