This is a pair trade idea based on CNQ/XLE pair cointegration. My calculations show that these two stocks diverged by more than 2 standard deviation and, based on mean reversion, should come back to mean. This pair's rolling mean is 28.3 over the last 280 trading sessions. The current value is 23.6 and one standard deviation is 1.8. The trad can be done by...
4R Weekly Short: Stop: 24.45 Enter: Market Target: 16.77
Analysis on chart.. Good risk/reward offered here
The price of crude oil has been in a downtrend now for about 3 months. With this decline, oil stocks such as Canadian Natural Resource Ltd (USA) (NYSE:CNQ) have also come down in price. In fact, this equity has fallen roughly 13% from its peak back on July 1. However, the thing that really interests me is the pattern that is being formed on the daily chart. It is...