The note gained nearly 3.5% over the trailing three months and has clearly outpaced the broad U.S. market fund (NYSEARCA:SPY) and the ultra-popular short-term bond (NYSEARCA:BSV) by a wide margin. This trend is likely to continue given sooner-than-expected interest rate hikes as well as positive technical signals (see: all the Government Bond ETFs here).
Although the note hasn’t broken out of its near-term range, its short-term moving averages (9-Day and 50-Day SMA) is now comfortably above the longer-term 200-Day SMA, suggesting continued bullishness for this ETN.
Meanwhile, the product’s RSI is below 60, suggesting that the note isn’t too overbought, and that it still has some more room to run. This is further confirmed by an upswing in the Parabolic SAR, although this figure should definitely be monitored closely.
Given that the increase in interest rates could come sometime in the middle of 2015, the Flattener ETN makes for a compelling choice for investors seeking to take advantage of the flattening yield curve.
This article is brought to you courtesy of Eric Dutram.