The Treasury Bonds, Utilities And Junk Bond ETFs Have Positive Weekly Charts

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Includes: JNK, TLT, XLU
by: Richard Suttmeier
Summary

The Treasury Bond ETF set its 52-week high of $134.28 on July 3 with its all-time intra-day high of $143.62 set in July 2016.

The Utilities Sector ETF set its all-time intra-day high of $61.38 on June 20 with its semiannual risky level at $63.67.

The High Yield Bond ETF set its 52-week high of $109.62 on June 20 and its pivot for July is $107.59.

The yield on the 30-Year Treasury Bond declined to as low as 2.456% on July 5 and ended the day with a negative "key reversal," which sets the stage for higher yields. My quarterly value level is 2.873% with semiannual and monthly risky levels at 2.431% and 2.336%, respectively.

Here are weekly charts for these ETFs

The 20+ Year Treasury Bond ETF (NYSEARCA:TLT)

The U.S. Treasury 30-Year Bond ETF trades like a stock and is a basket of U.S. Treasury bonds with maturities of 20+ years to 30 years. As a stock-type investment, it never matures, and interest income is converted to periodic dividend payments.

Weekly Chart For TLT Courtesy of Refinitiv XENITH

The Treasury Bond ETF ($132.43 on July 5) is up 9% year to date and set its 2019 high of $134.29 on July 3. This ETF is up 18.3% from its 2018 low of $111.90 set on Nov. 2. TLT has a positive but overbought weekly chart with the ETF above its five-week modified moving average of $130.15 and well above its 200-week simple moving average or "reversion to the mean" at $124.41. The 12x3x3 weekly slow stochastic reading slipped to 87.97 last week, down from 88.55 on June 28. A reading above 90.00 would make TLT an "inflating parabolic bubble."

Investor Strategy: Buy weakness to its quarterly value level at $125.12 and reduce holdings on strength to its semiannual and monthly risky levels at $135,75 and $136.72, respectively.

The Utilities Select Sector SPDR Fund (NYSEARCA:XLU)

Weekly Chart For XLU Courtesy of Refinitiv XENITH

The Utility Stock ETF ($60.68 on July 5) is up 14.7% so far in 2019 and is 19.4% above its Dec. 26 low of $50.81. XLU has a positive weekly chart with the ETF above its five-week modified moving average at $59.74 and well above its 200-week simple moving average or "reversion to the mean" at $51.27. The 12x3x3 weekly slow stochastic reading rose to 79.43 last week, up from 79.17 on June 28.

Investor Strategy: Investors should buy weakness to its quarterly value level of $57.20 and its 200-week simple moving average at $51.27. Reduce holdings on strength to the semiannual risky level at $63.67. Annual and monthly pivots are $58.98 and $60.68, respectively.

SPDR Bloomberg Barclays High Yield Bond ETF (NYSEARCA:JNK)

Weekly Chart For JNK Courtesy of Refinitiv XENITH

The Junk Bond ETF ($108.61 on July 5) is up 7.8% so far in 2019 and is 10% above its Dec. 26 low of $98.76. JNK has a positive weekly chart with the ETF above its five-week modified moving average at $108.14 and above its 200-week simple moving average or "reversion to the mean" at $107.62. The 12x3x3 weekly slow stochastic reading rose to 70.40 last week, up from 64.28 on June 28.

Investor Strategy: Buy weakness to its annual and semiannual value levels at $102.60 and $99.15, respectively. Quarterly and monthly pivots are $104.14 and $107.59, respectively.

How to use my value levels and risky levels

Value levels and risky levels are based upon the last nine weekly, monthly, quarterly, semiannual and annual closes. The first set of levels was based upon the closes on Dec. 31. The original annual level remains in play. The weekly level changes each week. The monthly level was changed at the end of each month, the latest on June 28. The quarterly level was changed at the end of June. My theory is that nine years of volatility between closes are enough to assume that all possible bullish or bearish events for the stock are factored in. To capture share price volatility, investors should buy on weakness to a value level and reduce holdings on strength to a risky level. A pivot is a value level or risky level that was violated within its time horizon. Pivots act as magnets that have a high probability of being tested again before its time horizon expires.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.