- Closed pair trade: Long IYZ, Short IDU.
- Net Return: +4.46% since 11/10/2010.
The Telecommunications sector (IYZ) sits in an overbought range, while the Utility sector (IDU)–in which I held a short position–has recaptured a bullish trend, as indicated by the reversal in its long-term Slow Stochastic:
From a risk/reward standpoint, the probable risk of the long/short net gains imploding far outweighs what little upside may remain for the pair. Therefore, I’m closing both positions.