Mubasher: The rally in US treasury yields has been quite sharp, Citigroup said, urging investors to seize such opportunity.

Investors are advised to take profits in long 10-year Treasury positions, as yields could bounce back to 2.60% in the short term, given the possibility of a double-bottom technical pattern and potentially softer momentum, according to a Wednesday note by the investment bank. By 1:34 am GMT, US bond yields were at 2.35%.

Much like the W letter, double-bottom pattern describes the drop of a stock or index, followed by a recovery, another fall to the same or similar point as the initial drop, and another final rebound.

“The 10-year yield has bounced from our initial target of 2.35% and looks to have put in a double bottom, potentially aiming for the top of its year-to-date downtrend at 2.60%,” the Citigroup note was quoted by Bloomberg.

So far this month, the yield on the benchmark US bond has shed around 12 basis points (bps) as a re-kindled trade conflict between the US and China boosted demand for safe-haven assets.