Diary of a Financier

Closed Trades: IYZ Long/IDU Short

In Capital Markets on Tue 28 Dec 2010 at 17:23
  • 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:

IDU weekly chart

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.

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  1. […] see an impetus from today’s announcement to push the stock higher.  Plus, I made note about the waning strength of Telecomm stocks at the end of […]

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