Thursday, October 21, 2010

MRF Watch

I'm adding the American Income Fund Inc. (MRF) to my Income Watchlist. The closed-end fund holds bonds, 65% of which are rated investment grade, and pays 7.84% dividends.

MRF $9.18

The downside, by my rules, is liquidity: Average volume the last 10 trading days is only about 57,000 shares.

MRF since 2000 seems to have a "natural" home between $7 and $9, with the occasional break-out and break-down. Currently the fund is trading at the level of the swing high set in 2003. So it is at the high end of its range.

The dividend is paid monthly, a very good thing for an income play.

About a third of the fund's holdings are mortgage-backed securities issued by the U.S. government agencies Fannie Mae and Freddy Mac.

All in all, MRF is a place to park money, much like the exchanged-traded fund JNK, but with better quality debt. A drop below the 20-day moving average, presently at $9.10, would trigger an exit so I could reopen the position at a lower level.

Tim Bovee, Private Trader tracks the trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.

No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decision decisions for his or her own account, and take responsibility for the consequences.


  • h-a trend - Heikin-Ashi trend.
  • pps - Person's Proprietary Signal.
  • psar - Parabolic Stop and Reverse
  • ma20 - 20-day moving average
  • ma200 - 200-day moving average
  • macd - Moving Average Convergence-Divergence
  • sto - Fast Stochastic

About the glance: The colors indicate the state of each signal.

  • h-a trend: Determined by the Heikin-Ashi candlestick, green for up, red for down. Heikin-Ashi averages six days for high, low and close, signalling uptrend if the close is in the upper half of the range and downtrend if it is in the lower half.
  • sto: green for bull, red for bear.
  • sto zone: green for overbought (80+), red for oversold (20-), yellow for neutral zone
  • psar, pps, macd: green for bull mode, red for bear.
  • macd trend: green for rising, yellow for sideways, red for falling.
  • neutral.
  • ma20, ma200: green for above the average by more than 1%, red for below the average by more than 1%, yellow for within 1% either side of the average.

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