Thursday, July 23, 2015

Is HYG Heading Down to Test Dual Support at $85/share?

The chart below shows that HYG recently broke below a longer-term weekly support line (dashed green).  

How much further will HYG fall?  I don't know and won't make a prediction.  However, the chart analysis below shows possible dual support lines (solid green) around the $85/share level.  

Most rallies occur off of support lines.  Will a rally occur off of these lines if the price falls this far?  No one knows. We will just have to wait and see what happens.  However, if positive price action occurs after the price hits these support lines, being interested in owning high yield bonds because they are an appropriate investment for me (they may not be appropriate for you!), I would consider implementing a buy and protect strategy using the long-term rising support line as stop loss.

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

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

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