Treasury 10-Year Yield Surge May Be Ending: Technical Ana

A surge in 10-year yields may be coming to an end after they reached a technical barrier, according to Shin Kong Life Insurance Co., citing trading patterns.

Treasury rates climbed to 2.40 percent yesterday, above the so-called upper Bollinger band level of 2.37 percent. It was also the highest level since October.

“The current level is oversold,” said Will Tseng, who trades U.S. debt at Taipei-based Shin Kong Life, which has the equivalent of $52.2 billion in assets. Investors should “jump in” to buy, based on the indicator, he said.

Bollinger bands gauge volatility by plotting standard deviations above and below a moving average. Analysts use them to determine a probable range for a rate or security.

Ten-year yields were higher than the upper Bollinger level from March 14 through yesterday. The rate was 2.37 percent today as of 8:18 a.m. in London, versus the current Bollinger level of 2.41 percent.

In technical analysis, investors and analysts study charts of trading patterns and prices to forecast changes in a security, commodity, currency or index.

To contact the reporter on this story: Wes Goodman in Singapore at wgoodman@bloomberg.net.

To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net.

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