JNK: Chart Is Looking Dangerous
Trader Moe | Jul 26, 2015 01:56AM ET
SPDR Barclays (LONDON:BARC) High Yield Bond (ARCA:JNK) has Put In a Head and Shoulders at VWAP of its 5+ Year Megaphone Top
JNK has put in a head and shoulders with a neckline at VWAP of its 5.5-year megaphone top (red on chart).
A topping formation at a megaphone VWAP, if it actually breaks out, usually means the price is going to break out the megaphone bottom.
The target for the breakout in this case would be roughly the 2009 low.
The set-up to short is a breakout through the H&S neckline. A right shoulder triangle before breakout would strengthen the short set-up.
A right shoulder megaphone and fake breakout would be a signal to abandon the trade.
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