Long Bond ETF gets bullish signal ahead of Fed meeting
Treasury prices have been trending higher and yields have been trending lower for the better part of eight months now. After the Fed meeting in December, the Open Market Committee raised the Fed Funds target rate, but the Fed has been more dovish in its commentary since then. This has led to a rally in treasuries that is one of the strongest in history.
While the Fed only directly controls the Fed Funds rate, its actions have an effect on the entire spectrum of treasury issues. The 30-year bonds have been rallying just as much as other maturities and the iShares 20+ Year Treasury Bond ETF (Nasdaq: TLT) has moved from the $110 area to a recent high of over $134. Over the last five months, a trend channel has formed on the TLT and the fund has moved toward the lower rail in recent weeks.
The small pullback was enough to move the daily overbought/oversold indicators out of overbought territory and it moved the daily stochastic readings in to oversold territory earlier this week. The indicators made a bullish crossover on July 16.
In addition to the potential bullish signal from the stochastic readings, the Tickeron Trend Prediction Engine generated a bullish signal for the TLT on July 14. The signal showed a confidence level of 89% and it calls for a rally of at least 4% within the next month. Past predictions on the TLT have been successful 74% of the time.
TLT in downward trend: price dove below 50-day moving average on May 12, 2023
TLT moved below its 50-day moving average on May 12, 2023 date and that indicates a change from an upward trend to a downward trend. In of 43 similar past instances, the stock price decreased further within the following month. The odds of a continued downward trend are .
Technical Analysis (Indicators)
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on May 16, 2023. You may want to consider selling the stock, shorting the stock, or exploring put options on TLT as a result. In of 87 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
The 10-day moving average for TLT crossed bearishly below the 50-day moving average on May 12, 2023. This indicates that the trend has shifted lower and could be considered a sell signal. In of 11 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where TLT declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
The Aroon Indicator for TLT entered a downward trend on May 30, 2023. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Bullish Trend Analysis
The Stochastic Oscillator suggests the stock price trend may be in a reversal from a downward trend to an upward trend. of 55 cases where TLT's Stochastic Oscillator exited the oversold zone resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .
The 50-day moving average for TLT moved above the 200-day moving average on May 03, 2023. This could be a long-term bullish signal for the stock as the stock shifts to an upward trend.
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where TLT advanced for three days, in of 300 cases, the price rose further within the following month. The odds of a continued upward trend are .
Fundamental Analysis (Ratings)
Industry description
General Information
Category LongGovernment
TLT and
Correlation & Price change
A.I.dvisor indicates that over the last year, TLT has been closely correlated with SPTL. These tickers have moved in lockstep 100% of the time. This A.I.-generated data suggests there is a high statistical probability that if TLT jumps, then SPTL could also see price increases.
| Ticker / NAME | Correlation To TLT | 1D Price Change % | ||
|---|---|---|---|---|
| TLT | 100% | +1.00% | ||
| SPTL - TLT | 100% Closely correlated | +1.12% | ||
| VGLT - TLT | 100% Closely correlated | +1.04% | ||
| EDV - TLT | 99% Closely correlated | +1.17% | ||
| ZROZ - TLT | 99% Closely correlated | +1.74% | ||
| TLH - TLT | 98% Closely correlated | +1.18% | ||
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