Here is just another way to look at how nicely WMT is positioned versus the overall market. The recent wave of news pushed WMT down to a decent level and the recent linear-rally in the overall market (perhaps dragged up by technology and oil shares) has a reasonable profit-potential sitting on the table.
Upside: 5% in the next two weeks. Risk: 5%.
By: Technical Tim, March 5, 2012 3:52PM EST
Comments
MyPriorSelf
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Great call, thanks Technical Tim
timwest
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Thanks gnomishmath :-) It is great to trade in a way that cuts down on the "market risk". I have pointed out GE versus the market also, in case you are looking for other super-cap pairs. Cheers.
charttrader
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Agree, well done Tim.
timwest
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This trade has worked tremendously on a longer term basis.
timwest
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At the close of March 5th, SPY was 136.77 and now it is 140.35 for a gain of 2.62%. WMT was 59.37 and now it is 61.02 for a gain of 2.78%. Not much return for this trade so far. Tim, Friday 2:35PM EST March 16, 2012
Algokid
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Good one Tim, Got in that trade a little bit early on Feb 22. Just curious , how do you find your pairs ? I use standard deviation, correlation in an excel sheet
timwest
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I read news stories, articles and watch price action. My brain just stores all of the combinations that I track. TradingView lets you see how something is acting relative to something else. I also plot ratios at stockcharts.com by separating the symbols with a ":" and no spaces. It is a great way to look at ratios. Typically, I keep in mind what stocks are moving on news, then remember to check out where they are about 3-5 days later. How many pairs do you monitor?
Algokid
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Yeah, that stockchart.com tip that you gave has helped me a lot with the pair trading, thank for sharing that again. Right now have 6 pairs open, most of them in natural gas. Everything was going ok until natural gas started a descent back in early January. The spread between the stocks became too big ( 20 % + ) so i had to take some losses . I'm now revising my pairs and try to diversify them in different sectors, hence why i haven't posted any new pair trade lately.