VantagePoint Trading Software is a forecasting tool that uses both end of day data and artificial intelligence to provide traders a forecast of market movement. These forecasts are 1-3 days in advance and help traders improve their timing on making trades and maximizing profit potential. The artificial intelligence software forecasts market movement for stocks, futures, Forex and ETFs.
U.S. stock index futures are pointing to a firmer open ahead of fresh economic data that includes numbers on industrial production, the Housing Market Index and JOLTS. Earnings season is also kicking into high gear as Netflix (NASDAQ: NFLX) becomes the first large technology company to report results. On the radar are also quarterly figures from BlackRock (NYSE: BLK), Goldman Sachs (NYSE: GS), Morgan Stanley (NYSE: MS), Johnson & Johnson (NYSE: JNJ) and IBM.
*Source: Seeking Alpha
Let’s consider Foot Locker, Inc. (Ticker: FL):
The VantagePoint platform recently indicated upside momentum.
Using the predictive indicators embedded within the VantagePoint platform and its predictive AI technology, we will point out three significant things. We have a bullish crossover indicated by the blue predictive indicator line crossing above the black simple moving average October 11th. We can combine that with the VantagePoint propriety neural index indicator moving from the RED to the GREEN on that same day. This indicator measures strength and weakness for a 48-hour period, in this case, strength. The move to the GREEN position further makes the case for a potentially neutral to bullish scenario. We also have the predicted high and low above yesterday’s actual high and low indicating further strength. I want to play the VP bullish indication.
If you are strictly a stock trader, simply buying FL in the $50.50 area is a prudent move. You are anticipating a move to the upside. It is always a good idea to enter a sell-stop order to mitigate potential losses. Placing that sell-stop in the $48.45 area will achieve that goal.
For active traders with a shorter investment time horizon, you can consider a setup utilizing options. Given the market conditions outlined above, taking a passive, premium credit approach may be the best path to success.
Because of the reasons given above, the sale of a credit put spread may be one way to approach this situation. You want to take in as much premium as possible while maintaining the parameters of your risk tolerances. You may want to consider the FL November 16th regular monthly expiration 47/49 put spread, selling it for $0.65. The most you can gain is the premium collected and the most you can lose is the width of the wider spread less any premium collected. Max gain = $0.65 and max risk = $1.35.
This means that you are laying odds of 2.08:1.
Given the trading and market environment outlined above, a trader must evaluate whether this reward/risk ratio is appropriate for his/her risk tolerance.
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