The High Yield Corporate Bonds ETF (HYG) has broken out above a 8 month consolidation. When the price is rising on a "High Yield" corporate bond fund, it is considered to be that investors are willing to accept more risk. While this is not a portfolio tool for safety, it can be a good indicator of investor appetite towards risk. This is different than an investment grade corporate bond fund like LQD.
While this is climbing it is bullish. If it breaks the 5 month uptrend line this would change the technical picture to a more bearish stance. It closed last week at new highs after travelling sideways for 8 months.
A good chart to watch for a change in investor sentiment but it looks bullish here at new highs.
Good trading,
Greg Schnell, CMT
About the author:
Greg Schnell, CMT, MFTA is Chief Technical Analyst at Osprey Strategic specializing in intermarket and commodities analysis. He is also the co-author of Stock Charts For Dummies (Wiley, 2018). Based in Calgary, Greg is a board member of the Canadian Society of Technical Analysts (CSTA) and the chairman of the CSTA Calgary chapter. He is an active member of both the CMT Association and the International Federation of Technical Analysts (IFTA).
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