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Bond of the Week: 22 November 2013

Barclays and RBS bonds are top heavy


The persistent advance from the mid-2012 floor around 80, by the Barclays Bank bond, faltered early this year near 110.  Although it went on to plot a fresh high later, action for most of the subsequent months lends the pattern a top-heavy aspect, with the lower boundary established near 100.  Recently, valuations have turned away from the upper boundary again and a quick upturn is required to offset current scope for a further retracement towards the lower perimeter. 

The RBS bond also reached its pinnacle in the early months of this year; just under 110.  Since July, it has been trying to recuperate the steep fall from the top area.  However, the recovery rally is already losing steam near 107.  Perhaps this marks the start of the next down leg.

The last picture shows the three-year chart for the UK's FTSE 350 Banking sector Index.  One observes that this year's top has been developing near historic resistance from the larger late-2009/early-2011 top formation.

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