This chart is so interesting on the 10-year basis that the picture alone was worth a thousand words. But I saved you from reading those thousand words since I think the picture shows it.
If you plot the ratio of these two securities (you simply type AVB / MTN in the quote box window here at TradingView) you will see that the ratio has fallen back to the levels where it has bottomed massively before.
If you can risk 3 average daily ranges, in either one of these stocks, then that is what the risk will be set at. I don't have the exact trigger for this trade yet, but I wanted everyone to see what I am looking at first before jumping in too soon.
I think there is a 10%-20% return in this trade with risk that is less than 6%. This implies a 2:1-3:1 return versus risk. I think the probability of this setup being profitable is north of 50%, looking more towards 60%. Just my sense. It's not much better than flipping a coin, but I like my odds overall.
Tim 12:27PM EST Wednesday, August 28, 2013