Euro−Bund future – March 2010

Nicole Elliott from Mizuho Corporate Bank at 01/25/10

Comment: Schatz and Bobls are back up close to record highs, and the Bund should follow suit. Momentum has reversed dramatically over the last three weeks and though the contract is slightly overbought, all other aspects of daily and weekly charts suggest a long position. Note that market consensus probably does not support this view suggesting many will have to be dragged kicking and screaming into the fray. We continue to allow for moves to new record highs.

Strategy: Buy at 123.13/123.00; stop below 122.50. Add to longs on a daily close above 123.65 for 124.00 short term, 124.70/125.00 medium term and probably more eventually.