AOD bull

AOD, the eclectic high-yield income fund, is showing a very slight bull signal on the macd after 20 days in bear territory. The stock today has traversed 3.5% low to high, an increase that moved it from the low end of the recent trading range to the high end.

AOD pays dividends monthly with a really high 17%+ annual yield. That means when it goes ex-dividend, as it did yesterday, it has a huge effect on the price. Today's upward move wipes out the ex-div penalty entirely.

The Money Flow Index is in neutral territory but rising toward the overbought level. It has far to go before getting there, however.

Trading at $8.39, AOD has support at around $7.80 and resistance at $8.75, and higher at $9.20. So it has room to fluctuate either way before running into its own history.

More broadly, AOD has been in a downtrend since mid-January, so any bull play would be counter-trend.

I hold some shares of AOD now, and generally I don't worry so much about the trend for these income-producing shares. I do worry a lot about support and resistance levels, and any break beyond those is a signal for me to close out the position and wait a bit to see what happens.

I find their strategy to be interesting: They engage in active dividend capture, meaning they get into a position to catch the dividend, and then get out and use that money to capture another dividend. They also have heavy foreign involvement, which makes the fund vulnerably to currency surprises and international debt worries, such as the recent Greek/euro brouhaha.

Topics:
Alpine Dynamic Dividend fund.