Thursday, August 14, 2014

Corporate High Yield Bond Funds Bounce Off Support and Regain Trend?

July and the beginning of August were not too kind to corporate high yield bond funds. As shown in our previous post, selling pressure caused a break down through several support lines and into oversold conditions.  

However, in the last week or so, as shown in the charts below, three of the funds we track, including two very large asset funds BHYSX (Blackrock) and VWEHX (Vanguard), as well as NHINX (Neuberger-Berman), have bounced off long-term support line(s) S2, and have moved back above support line(s) S1, which was recently broken during the sell-off.   Please note the charts for these funds have been simplified from the previous posts - the number of lines shown have been reduced and relabeled for clarity. 

(Click Charts to Enlarge)

Going forward, we will be interested to see how far this rally goes and how price action may be affected by some of the support lines that were previously broken and that may now act as resistance.

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 position(s) in NHINX and other corporate high yield bond funds early this week.

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

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