DecisionPoint

DP Bulletin: IT Trend Model BUY Signal for Bonds (TLT)

As noted, a new technical alert arrived in my email inbox this afternoon. I was surprised that I didn't receive word of any DP Scoreboard PMO signal changes, but seeing TLT grab an ITTM BUY signal wasn't surprising. I think TLT is at an interesting "decision point" right now. Here's a look at the daily, weekly and monthly charts.



An Intermediate-Term Trend Model BUY signal is generated when the 20-EMA crosses above the 50-EMA. The daily chart looks pretty good. The PMO is rising nicely along with the OBV and SCTR. What could be a problem is overhead resistance around $127 for TLT. A look at the weekly chart confirms the strength of this resistance.

Granted it looks more like resistance around $128 on the weekly chart, but the concept is the same. We have three important "touches" that add strength to the horizontal resistance line drawn from the 2015 top. Good news is that we can see an IT PMO BUY signal is just about to trigger.

I'm a bit concerned about the longer-term picture on the monthly chart. I'm seeing what could be a head and shoulders pattern. It isn't a pattern until you get a breakdown below the neckline around 145 for $USB. However, I'm not so sure we're looking at the makings of a big decline off a head and shoulders pattern. The long-term PMO is oversold and does appear to be decelerating its move.

Conclusion: Overall I think Bonds look healthy and should be able to crack overhead resistance at around $128 for TLT and a breakout above 157 for $USB


Helpful DecisionPoint Links:

DecisionPoint Shared ChartList and DecisionPoint Chart Gallery

Trend Models

Price Momentum Oscillator (PMO)

On Balance Volume

Swenlin Trading Oscillators (STO-B and STO-V)

ITBM and ITVM

SCTR Ranking


 

Technical Analysis is a windsock, not a crystal ball.

Happy Charting!
- Erin


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