Tuesday, October 13, 2015

Technical Analysis : KTB 10 Yr Future, It's time to sell bonds ?!

Below chart is about the price of Korean treasury bond future with 10 year maturity on a weekly base. It signals it's time to sell the long-end tenor bonds as considering Korean rates often tend to lead the global bond markets, albeit I consider the time horizon for this as by the end of this year.

We could find some hints in below weekly candle chart with

1) In a red circle, we could see the island gap in this weekly chart ! It's consist with one positive candle and another negative candle, respectively. Surely, however, because it's before the end of this week, we could not believe this pattern yet. But, other 2 rationales should underpin the short view.

2) MACD is drawing a divergence.

3) A lag span is matched with previous inflection point seen in a green circle.

So, shortly we may be cautious the possible bond bear market.
Moreover, this could be in line with the risk appetite, especially strong credit products in bond markets. Therefore, we should plan to buy corporate bonds against treasury bonds moderately...


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