I have been trying to decipher the technicals on these trusts over the last several quarters. They appear to undergo a dividend run some 4-6 weeks prior to the announcement, but then start selling off even prior to the ex-div date. So far SDT has cleared the 50 dma and there appears to be some resistance right at the current level where it filled the gap down in March. I don't know where the rally will stop -- is there a Fibonnacci retracement level at 16 which marks a retracement of the downturn from 19 to 12.5? One thing is that the fundamentals have seemed to deteriorate and those that bought at the low of $12.5 surely will not wait around to see how production or pricing goes over the next quarter. I would expect the hedge funds to start shorting again right after the ex-date if not sooner. That seems to have been the pattern over the last few months.
I'm a mechanical engineer and work with technology, so I say it's at a buy point now and also after dividends, if it stays below 18-20. A dividend of 15-18% div in the current low rate environment is always a buy if the risk is acceptable.
At this price most of the risk should be gone...
And gas looks bullish for the first time in several years.
The dividend yield is misleading. That high yield is not fixed and is susceptible to being cut over time. The prospectus gave targets and subordination levels, but one trust issued before this (ECT) got clobbered when the distribution was not supported once the subs converted. Those distribution projections were based on higher assumptions. I could be wrong, but I think these trusts have become trading vehicles to buy when they become oversold and their RSI levels are under 20 and to sell into the dividend run that seems to occur each quarter.