LQD Corporate Bonds Weekly Chart

LQD corporate bonds had a fall from grace in November as forecasted by the rising wedge and negative divergence shown in blue. Note the ongoing fight now with the 20 MA, watch this for indication on price direction moving forward. Bulls need price to stay above the 20 MA while bears want to see price fall back under the 20 MA. Also watch the 50% levels for RSI, stochastics and money flow to gauge the bullishness versus bearishness.

Note the red lines showing a lower low in price but instead of positive divergence occurring to institute a bounce, the bounce occurred with no positive divergence. The indicators are all weaker with price, hence, a weak and bleak profile, so lower prices need to be explored moving forward. Projection is sideways to sideways lower for the weeks and months ahead; a move towards the support at 108 serves as an initial target as we move into early 2012. This information is for educational and entertainment purposes only. Do not trade based on this information. Consult your financial advisor before making any investment decision.