With just minutes til the FOMC announcement, I've entered a long in Proctor & Gamble (PG) to hedge my COF short play.
There's going to be a lot of fake moves after the FOMC meeting for sure. So I'd rather hedge my short position than set a tight stop.
I chose PG because it seems to be the least short-term overbought from the Cara 100 list. And on a closer inspection, it seems alright. I am basically choosing a company with the least apparent downside risk of the best 100 global companies.
Reward / Risk = 1.54 / 0.36 = 4.3 \< 5, but this is a small hedge position to minimize my risk, not to make profit.
[caption id="attachment_1686" align="aligncenter" width="500" caption="Proctor & Gamble"][/caption]
[caption id="attachment_1687" align="aligncenter" width="500" caption="Proctor & Gamble"][/caption]
: http://traderpau.files.wordpress.com/2009/08/2009-08-12-pg.png : http://traderpau.files.wordpress.com/2009/08/2009-08-12-pg_prop.png