FGE is an ideal pairs trading idea | Michael Gable | Finance News Network

FGE is an ideal pairs trading idea

by Michael Gable

FGE is a good quality company that now looks great on the charts. I can see that the stock has pulled back in 3 waves (counter trend move) to 50% of the range. Yesterday's candle created a piercing pattern which is a sign of a reversal. I can also see the RSI moving out of oversold.

FGE therefore looks good on the long side. For those people worried about the resources sector, a possible trade is to short a resource stock that you are concerned about (eg, FMG, ILU, SLR), and go long FGE. If FGE outperforms your other weak resource stock, then this can be highly effective pairs trade to hedge against the short position.

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