Fire Fang is pretty meh. But modest is really good, as Arcanine gets some great special moves which make up for the fact that his base attack is 5 points or so higher...which isn't much at all.
I'd go with the adherence glasses or something, and give him
Flamethrower (Naturally)
Dragon Pulse (for Handling those every popular dragons, plus, it gives you a move that has very little resistances)
HP Grass (great for covering the rest of what he misses)
and the last one is up to you. Maybe HP rock, or dark pulse if he learns it. Extreme Speed is always good, even with a modest nature.