By Tom Aspray, MoneyShow.com

For most of 2011, with Treasury yields so low, the search has been on for safe, sizable dividends. This explains why the SPDR Diamond Trust (DIA), which tracks the Dow Industrials, is up 4.3%, while the Spyder Trust (SPY) is down 1.2%.

Of course, dividends are not included in these performance numbers, but the demand for large-cap, high-yielding Dow stocks has been strong. In many cases, those who went for the highest yields this year have fallen further behind because many high-yield stocks have dropped sharply in price.

Many dividend seekers don’t use technical analysis as part of their decision-making process, but they should. If investors had looked at major trend lines and levels of support, as discussed in "How to Get Started in Chart Reading," they might have stayed out of these three high-yield disasters.

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Chart Analysis: Frontier Communications Corp. (FTR) is a $4.9 billion telecommunications company that currently yields 14.6%. At the end of 2010, FTR closed at $9.66. With a dividend of $1.00, it was yielding 10.3% -- a figure that on the surface looked attractive. However, the stock is down 45.5% for the year.

• The weekly chart shows a very long-term negative pattern, as the rebound in 2008 just tested the former support (now resistance), line a, before turning lower
• The long-term downtrend, line b, is clearly intact, and the two-year continuation pattern (lines 1 and 2) was just an interruption in the downtrend
• The relative performance, or RS analysis, broke key support in 2007, line c, and has formed lower lows (line d) ever since
• The stronger relative performance of the on-balance volume (OBV) likely reflects the high-yield buying frenzy this year
• First resistance now stands at $5.60 to $5.80 with further resistance at $6.40

Invesco Mortgage Capital Inc. (IVR) is a $1.7 billion mortgage investment company that currently yields 17.9%. It is down over 35% so far in 2011 and the weekly chart shows a short-term flag formation (dashed lines). This is likely a continuation pattern, which suggests a further decline.

• The Fibonacci targets from the flag formation are at $11.80 with further targets in the $9.60 to $10 area (see “Using Fibonacci to Trade Flag Patterns”)
• The weekly chart shows that IVR completed its top formation in June when it closed below major support at line e
• The RS line has been making lower lows since 2009 (line f), indicating it was underperforming the S&P 500. It dropped sharply this fall
• The weekly OBV dropped sharply in March and shows a well-established downtrend, line g
• Short-term resistance now stands at $16.20 with key support at $14.20

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