Wednesday, July 16, 2014

Blackrock High Yield Bond Fund (BHYSX) Breaks Key Long-term Support?

Our previous post here showed that two large total asset, no-load, corporate high yield bond funds, VWEHX (Vanguard, $17.2 Billion) and BHYSX (Blackrock, $15.1 Billion), had formed rising wedges over the last year and were in "overbought" conditions per the RSI (Relative Strength Index above "70" - upper section of the charts).  

Now it appears that at least one of these funds, BHYSX (Blackrock) has broken below key long-term support line S1 based on the chart below. I
n this chart, S1 and resistance line R2 form a large, longer-term (multi-year) rising wedge pattern. Similarly, S1 and resistance line R1 form another shorter-term (1-year) rising wedge pattern.

Both of these rising wedges appear to have been broken by BHYSX's recent downward price trend in July 2014. Rising wedges are often reversal patterns.

(Click Chart to Enlarge)

BHYSX Chart: 5yr | daily | semi-log | unadjusted prices

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 does not hold positions in either of these funds (BHYSX, VWEHX), and has sold positions in several other corporate high yield bond funds on 7/11/2014 and 7/16/2014.

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

No comments:

Post a Comment