#PAIRtradeIDEA Long WHL vs. Short TRU
Woolworths has reversed off its bottom channel of relative strength vs. Truworths. RSI and MACD relatively depressed and should start to turn up. With the current state of the economy I believe Woollies should be better placed to withstand the economic storm than Truworths which is predominantly more of a 'luxury' clothing retailer. I think Woolies Food component should be the difference here into the next few weeks. In an inflationary and high interest rate environment, people still need to eat, they don't really need new or expensive clothes.
On this fundamental basis and because I like the technicals I am looking to put on the trade as follows:
Entry - 0.90 to 0.94
Stop loss - 0.84
Target 1 - 1.06, Target 2 - 1.12
If you manage to reach both targets with an average of 1.09 exit,
We are looking at roughly 0.19 upside at a 0.90 entry for a risk of 0.06 which makes this a good 3:1 risk reward ratio
Happy Trading <3
On this fundamental basis and because I like the technicals I am looking to put on the trade as follows:
Entry - 0.90 to 0.94
Stop loss - 0.84
Target 1 - 1.06, Target 2 - 1.12
If you manage to reach both targets with an average of 1.09 exit,
We are looking at roughly 0.19 upside at a 0.90 entry for a risk of 0.06 which makes this a good 3:1 risk reward ratio
Happy Trading <3
"If you do what you love, you'll never work a day in your life" - Marc Anthony
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