In our last review of the TLT, the iShares 20+ Year Treasury Bond ETF, on February 10 we wrote that "... traders should expect that interest rates could move significantly higher this year." We noted Point and Figure targets of $119 and then $96.
With the TLT trading around $112 early Monday morning let's check on the charts again.
In the daily bar chart of TLT, below, we can see that the ETF will be making a new low for the move down this Monday morning. Trading volume has been increasing since early in the year and this tells me that more and more traders and investors are behind the story of rising rates. The slopes of the 50-day and 200-day moving averages are negative and the TLT is not extended (oversold) relative to the 200-day line.
The daily On-Balance-Volume (OBV) line is in a decline and the Moving Average Convergence Divergence (MACD) oscillator is bearish.
In the weekly Japanese candlestick chart of TLT, below, we went back five years to get some perspective. Prices are in a longer-term decline. The slope of the 40-week line is negative.
The OBV line and the MACD oscillator are weak.
In this daily Point and Figure chart of TLT, below, we can see a price target of $107.
In this weekly Point and Figure chart of TLT, below, we used a five-box reversal filter. Here the software suggests a price objective in the $90 area.
Bottom-line strategy: Continue to avoid the long side of the TLT. Keep your maturities short as rates continue to rise.
