Sunday, May 25, 2014

Emerging Market High Yield Fund (TGEIX) Continues to Climb - Faces Resistance

In a previous post dated May 11, 2014, we showed that emerging market high yield bond fund TGEIX was breaking up through several lines of resistance, including the line now labeled S1 in the chart below.  Since breaking above this line, TGEIX has continued to climb within the rising wedge defined by resistance line R2 and support line S2. Now it appears that TGEIX is up against resistance line R1 that extends back to the late 2010 time frame.

(Click Chart to Enlarge)

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

Going forward, we would not be surprised if TGEIX experienced a short-term pullback in price given resistance line R1, and that the Relative Strength Index (RSI) is approaching overbought territory (~70). 

In any case, we will be interested to see if S1 (and other former resistance lines in the previous post) continue to provide support and TGEIX's price continues to rise, perhaps at a more moderate rate, eventually breaking through resistance line R1.  

We will consider using former resistance lines, including S1, as stop loss triggers, if these lines are broken, to protect capital gains. However, we are open to TGEIX providing further gains in the long-term.

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 established a position in TGEIX on March 26, 2014.

Base Chart Provided Courtesy of  Analysis and Annotation by JunkBond (all rights reserved)

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