Tuesday, 26 June 2012

DVY - Support points and position entry

Unfortunately, haven't had much of a chance to post in the last few months due to moving to another country and overall busy changes.  Here's a try at refocusing and posting again.

After a rather wild stock market ride since May, question is now where to go.  No answer to that quite yet but for those who like to buy into the market at favorable points with the long term view that things go up, there are some good bargains today...as long as you're willing to stick it out.

One I will highlight today is: DVY

DVY is the iShares blue chip dividend ETF and is heavily focused on large companies that pay good dividends.  See their holdings:


Its current yield is 3.44% which is very respectable and it has been relatively stable in the face of market turmoil.  Its also mostly US focused (well as much as multinationals today can be...) which helps offset the problems with Europe and Asia.

The technical chart is below.  As you can see, it has an ok support line coming up at ~53-54 and is off of its highs at 56+.  Overall, not much movement which is good considering the market last 2 months.  While its not the biggest bargain, its a relatively safe way to dump some money into while the market is meandering at the bottom.  The upside to hit its recent peak is a decent 4% or so.

My Personal Advice: Based on its technicals, I would expect DVY has a small bit more to fall before it stabilizes.  Advice is to monitor it for signs of a short term bottom in the next week or so and start cost and time averaging into it.  It will not be for a huge ROI but will be a solid dividend play + safe play + nice little oversold bonus.


Stock - DVY
Category                           - Safe dividend play
Dividend Yield ROI           - ~3.5% - 3.5/5 Stars
Safety ROI                        - 4/5 Stars
Value ROI                         - 2/5 Stars
Expected Entry Timeframe - 1-2 wks