alice

NFTRH; An Anti-Yield Sector at Support

The near-term ‘yields rising’ play is still alive and while it is testing my patience, still the favored scenario. But I am well aware that the anti-yield Biotech sector for instance, appears near or at a buying opportunity, going strictly by the charts.

So in the event that yields fail, Treasury bonds break their bear trend and a fade toward risk ‘off’ comes in sooner rather than later, Telecom is another sector that could benefit or at least show relative strength to other sectors.

yields vs. stock sectors

The iShares Telecom ETF holds Verizon, AT&T, T-Mobile, Centurylink, Sprint, etc. It got hammered last week (despite its anti-yield bias) and is getting oversold on a daily chart.

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The weekly chart is also as oversold (by RSI) as it gets and is right at a well defined support area.

iyz

The monthly view begs a little more caution in that a trend line and additional support are lower, in the 26-27.50 range and RSI has made new lows. In other words, price momentum is obviously down.

iyz

So this is a moderate priority update simply to highlight a sector that is oversold at a potential support level, and could be a relative haven during any risk ‘off’ bouts featuring declining yields (rising long-term Treasury bonds). Of course, T bonds would also work well if that were the case. And let’s not forget about gold, which along with T bonds, would eventually gain a risk ‘off’ bid.

For now, it seems like an item to put on radar as events unfold.