Market Neutral/Pairs Trade Idea: Long Clicks / Short Dis-Chem
DCP has been one the best performers over the last few months. I initially recommended in July at R17.00, followed by 2 Trading View publications in December 2020 below 2150c (see attached). At current levels, the share trades ~ 3016c, with the 4H and daily RSI at 90 and 95 respectively. If you, like me, feel that DCP has run a bit too hard, you could pair consider a pairing a DCP short with a CLS long.
Here, the trader makes a profit in one of three ways.
1. CLS rising and DCP falling
2. CLS rising faster than DCP rising
3. CLS falling slower than DCP falling.
On the left, you'll note the ratio chart being extremely extended versus the 200-day moving average while nearly all the major short term time frames are 'oversold'.
Whether this is the exact low, I don't know however the short term reward-to-risk is starting is becoming attractive for a smaller-sized pairs trade.
Current Price (Ratio): 8.43
Entry Range: 8.37-8.44
Stop-loss: 8.24 ( a wider stop)
Target Range: 9.05-9.20
Here, the trader makes a profit in one of three ways.
1. CLS rising and DCP falling
2. CLS rising faster than DCP rising
3. CLS falling slower than DCP falling.
On the left, you'll note the ratio chart being extremely extended versus the 200-day moving average while nearly all the major short term time frames are 'oversold'.
Whether this is the exact low, I don't know however the short term reward-to-risk is starting is becoming attractive for a smaller-sized pairs trade.
Current Price (Ratio): 8.43
Entry Range: 8.37-8.44
Stop-loss: 8.24 ( a wider stop)
Target Range: 9.05-9.20
Trade closed manually:
Update - Even though the price continues to trade within the entry and has not tested it's stop-loss, I am closing this trade idea (flat) on the basis that it's a very slow mover.
