HYXU: Resistance Break & Restest
Technical Analysis:
HYXU (iShares International High Yield Bond ETF) has been slowly grinding upward since it's October '22 lows. After almost 17 months beneath the Bull Market Support Band (20w SMA, 21w EMA), it crossed over the the upside in November of last year and has shown significant gains in the last 10 months.
The assets last big push came at the significant resistance level at $47.50, which it finally flipped after 3 failed attempts. Having just completed a successful retest of the level as support, I anticipate a clean move up to $49, then $51.25, based on prior S/R levels.
Fundamental Analysis:
As we've all had our eyes on the Fed for the last year and a half, I'm sure most of you know that interest rates are at their highest levels in roughly 22 years. By doing this, the Fed has pulled a large portion of liquidity out of the bond market with enticing, low-risk Treasury yields.
However, as we approach their terminal rate of ~550 BPs, and as the high cost of money starts to impede businesses' ability to invest and grow, I anticipate a rotation out of stocks and into fixed income investments. The most readily accessible of which, for retail investors, are corporate bond ETFs such as HYXU.
With a yield of ~6.5%, it remains more than competitive with even the highest paying treasury, and offers investors a liquid alternative to locking up their funds for months or years.
Feel free to post your questions, comments, concerns, qualms, quandaries, contributions, or conversation below!
**Disclaimer**
This commentary is provided for general informational purposes only and does not constitute financial, investment, tax, legal or accounting advice nor does it constitute an offer or solicitation to buy or sell any securities referred to. Individual circumstances and current events are critical to sound investment planning; anyone wishing to act on this article should consult with his or her advisor.
HYXU (iShares International High Yield Bond ETF) has been slowly grinding upward since it's October '22 lows. After almost 17 months beneath the Bull Market Support Band (20w SMA, 21w EMA), it crossed over the the upside in November of last year and has shown significant gains in the last 10 months.
The assets last big push came at the significant resistance level at $47.50, which it finally flipped after 3 failed attempts. Having just completed a successful retest of the level as support, I anticipate a clean move up to $49, then $51.25, based on prior S/R levels.
Fundamental Analysis:
As we've all had our eyes on the Fed for the last year and a half, I'm sure most of you know that interest rates are at their highest levels in roughly 22 years. By doing this, the Fed has pulled a large portion of liquidity out of the bond market with enticing, low-risk Treasury yields.
However, as we approach their terminal rate of ~550 BPs, and as the high cost of money starts to impede businesses' ability to invest and grow, I anticipate a rotation out of stocks and into fixed income investments. The most readily accessible of which, for retail investors, are corporate bond ETFs such as HYXU.
With a yield of ~6.5%, it remains more than competitive with even the highest paying treasury, and offers investors a liquid alternative to locking up their funds for months or years.
Feel free to post your questions, comments, concerns, qualms, quandaries, contributions, or conversation below!
**Disclaimer**
This commentary is provided for general informational purposes only and does not constitute financial, investment, tax, legal or accounting advice nor does it constitute an offer or solicitation to buy or sell any securities referred to. Individual circumstances and current events are critical to sound investment planning; anyone wishing to act on this article should consult with his or her advisor.