Trade of the Day

iShares 20+ Year Treasury Bond ETF (NASDAQ: TLT)

(Current Price: US$85.35) – TECHNICAL BUY

Buy price: US$85.35     Stop loss: US$81.20 (-4.86%)  

Take profit 1: US$92.20 (+8.03%)     Take profit 2: US$97.00 (+13.65%)    

(1) & (2): TLT formed a bullish reversal morning star candlestick pattern recently in descending wedge

(3): This was accompanied with bullish divergence on both Moving Average Convergence Divergence (MACD) and Relative Strength Index (RSI) technical indicators showing bearish momentum weakening as it made a higher low while the price made a lower low

(4): The MACD also made a fresh bullish crossover on 24^th October

(5): Another potential reversal signal was the increased volume build-up which represents increased turnover with fresh buyers interested to go long at low prices

Should the price do a reversal from the current downtrend and break out of the descending wedge thereafter, it could potentially retest the first resistance level at US$92.20, confluent with prior swing low supports in October last year and August earlier this year.

It could then head towards the next resistance level at US$97.00 which was the horizontal swing highs the price found resistance in August this year.

Expected timeline of the trade is 2-16 weeks from the date of report issuance.