Which Treasury ETF is Right for Your Personality

• Posted by Greg Harmon
• on June 8th, 2011

Despite record debt issuance, and a Congressional battle over rising the debt ceiling leading to the possibility of Government shutdown, US Treasuries are on fire. But with a multitude of ETF’s in the space covering the full maturity spectrum where is the best place to play this move? Depends on how fast you move. Let’s take a look.

iShares Barclays 1-3 Year Treasury Bond Fund, ticker: $SHY

The short term Treasury ETF, SHY, has been in a steadily rising channel since mid 2009. I is currently in the middle of the channel heading higher with the Bollinger bands expanding for the run up. The Relative Strength Index (RSI) is moving into a technically overbought condition where it has consolidated previously in the channel. And the Moving Average Convergence Divergence (MACD) indicator is increasing. It looks to continue it’s march higher at a slow and steady pace. If slow and steady is for you then short term Treasuries are your play.

iShares Barclays 7-10 Year Treasury Bond Fund, ticker: $IEF

The intermediate term Treasury ETF, IEF, has had rising trend line support since June 2007. After spiking higher into the Financial crisis it consolidated in a symmetrical triangle through early 2010 before running higher to 98 and then pulling back. Now finding support at that trend line, it is moving higher with a rising RSI and MACD. If it can get over the previous high ten it has a target on a Measured Move to the 104 area. The previous move took 6 months so an estimate of this top would be around October 2011.

iShares Barclays 20+ Year Treasury Bond Fund, ticker: $TLT

The long term Treasury ETF, TLT, had support of a rising trend for over 8 years, but for the past 2 1/2 years it has been bounded on the upside by a declining trendline resistance, forming a symmetrical triangle. As it nears the top of the triangle the RSI is rolling lower and the MACD is topping. If the week finishes higher these will like reverse higher continuing the trend. The top rail comes in at 98.60 this week as resistance and if it gets through it then the next level is at 102.6 and then the previous high at 111.80 before the pattern break out target of 134.00. A failure means a move lower to 94.42 support at the 50 day SMA followed by the 100 day SMA at 91.20 before another test of that 8 year trend line at 88.70. More potential but more risk.

(As always you can see details of individual charts and more on my StockTwits feed and on chartly.)

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