Saturday, November 22, 2014

Corporate High Yield Bond ETF (HYG) At Underside of Resistance?

The 7-year chart below (weekly closing prices) shows that corporate high yield bond ETF HYG rallied yesterday (Friday, 11/21/2014) but now may be at the underside of a line (R1) that has periodically acted as both resistance and support back into 2009.

On the shorter-term (1-year) weekly chart below it appears that HYG is trading down within the confines of a descending channel (blue lines).

So was Friday the start of significant rally or just a very short-term counter-trend head fake that will test the underside of resistance leading to lower prices?  Can HYG break out of the descending channel?  If prices continue to decline will support line S1 hold?   We shall see.

Click Chart to Enlarge

Click Chart to Enlarge

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 has no position in corporate high yield bond mutual funds at the time this article was written.

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