Corporate High Yield Bond ETFs and MUTFs Settle on Apparent Long-Term Weekly Support Lines

Today was not great for corporate high yield bond funds.  So we took another look at a number the ETFs and some of the MUTFs that we track and generated some long-term charts based on weekly closing prices.  

As follows, it appears that many of the funds have ended the week on apparent long-term weekly support lines.

First the ETFs (HYG, JNK, and PHB):

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click chart to enlarge

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And the MUTFs (mutual funds):

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click chart to enlarge

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As you may have noticed there are larger gaps between reaction points on the ETF graphs, which may make the support lines less credible.  However, the MUTFs have more evenly spaced reaction points, which supports the ETF interpretation, in our opinion at least.  Also, in the case of BHYSX, there appear to be three converging support lines.

If the support lines are confirmed by positive price action next week, this would be a situation where I would consider using a buy and protect strategy by using the support lines as stop-loss triggers to protect my initial investment.


Again, as clearly indicated below and elsewhere on this website in more detail, this is not investment advice - nothing in this post should be construed as advice or a recommendation to buy (or sell) corporate high yield bond funds.  This is simply an example of how I use technical analysis with a buy and protect strategy to invest.  I could lose money on an investment in corporate high yield bonds as could anyone else who uses this strategy.
 

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 junkbondrecycling.com 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 funds at the time this article was written. This position may change depending on future price action.