The iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT) is rallying off key lateral price support.
This bounce has neutralized the immediate bearish case… but it could still play into a bearish head and shoulders topping pattern. Time to take a closer look at the chart.
On the daily chart below, the treasury bond ETF tested a very important technical support zone near the 122 level. This level needs to hold… And so far, so good. TLT has rallied nearly 3 percent in the past week. It’s also worth noting that the RSI has snuck back above 50 and the MACD has crossed over and is nearing 0 (neutralizing the situation).
But TLT isn’t out of the “topping” pattern zone just yet.
Historically, treasuries trace out a lot of H&S’s, both tops and bottoms. A complex head and shoulders pattern could take shape from this area or even a bit higher. Something to be aware of.
COT data on the 10-year and 30-year has improved, but remains bearish, while sentiment remains somewhat bullish. I remain cautious on the long end of the curve.
20+ Year Treasury Bond ETF (TLT) Chart
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