We hope you had a nice Thanksgiving holiday.
We recommend taking profits in Thor Industries (THO) as we are seeing signs that its relief rally is beginning to falter.
With the pullback in Treasury yields over the past few weeks, we highlight a counter-trend opportunity that has developed in the iShares 20+ Year Treasury Bond ETF (TLT):
TLT confirmed a breakout above its 50-day moving average on Wednesday. It has entered the daily cloud where it faces initial resistance at the upper boundary near $107, but positive short-term momentum should help carry TLT above this level near-term.
The relief rally looks set to continue per our intermediate-term momentum gauges, as well, noting TLT had a recent oversold upturn per the weekly stochastics, enhanced by a weekly MACD “buy” signal. However, long-term gauges still point lower.
Our counter-trend objective for TLT is near $113, defined in part by an important Fibonacci retracement level. We would place a stop-loss level near $99, just beneath this week’s low and the current level of the 50-day moving average.
iShares 20+ Year Treasury Bond ETF (TLT, $102.53)
Target: $113
Stop-Loss: $99