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Bond of the Week: 18 October 2013

Paragon bond heads back to the May high

    

The Paragon bond started its advance after a floor was reached near 99 in June.  In the following months, an uptrend has developed taking prices back up towards the May ceiling.  A fall beneath support at the last reaction low, which is reinforced by the presence of both the long and short-term moving averages, near 101.5, would be required to interrupt the upward tendency.  Such a move would appear unlikely at present.

Should the Paragon 2020 6% fail to trade higher, one potential switch for capital gain may be into the 2017 3.729% which is currently trading around the 89.65 mark.  Two points to be mindful of are the fact that the 3.729% is subordinated and less liquid, although the quality of Paragon as a company must be taken in to account when making the decision.  More information can be found on Paragon, when we covered the latest bond issue on ORB here.

 

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