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Defensive pair trade opened

November 17, 2014

I have been on the look out for stock pairs and the first one that has triggered is a defensive trade: Kellogg (K) v Disney (DIS).

Kellogg (K) v Disney (DIS) daily chart

K V DIS DAILY 171114

  • This fitted my RSI divergence criteria at the early October low
  • The pair rallied to the mid October market index low, as you would expect for a defensive pair
  • The pull back lasted until 21 October. Since then, it has gone sideways despite the market indices rallying
  • Today, it rallied decisively above its four week range
  • I open a long position in K v DIS in real life and in the trading ledger for this blog. The stop loss is below the low of the last four weeks

Wednesday update

The closing prices on Monday were $65.14 for Kellogg and $90.41 for Disney, giving an entry at 0.720496. The stop loss is below the October low of 0.697755.

The ratio is already above the mid October peak.

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