AZN Stock Trading Journal with VantagePoint

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. AstraZeneca, AZN stock, is in focus today…

This journal entry looks at the recent market movements of AstraZeneca NYSE: AZN

VantagePoint Trading Journal AZN Stock

A closely-watched showdown at the U.S. Supreme Court today will determine whether states can force out-of-state online retailers to collect sales tax. South Dakota is asking the nine justices to overturn a 1992 Supreme Court precedent, appealing a lower court decision that favored Wayfair (NYSE: W), Overstock (NASDAQ: OSTK) and Newegg. This could have a considerable effect on the markets regardless of the outcome.

VantagePoint can sift through this data as it generates forecasts of market movement 1-3 days in advance with up to 86% accuracy. We can use the artificial intelligence forecasting software to analyze markets at all levels. Whether you are looking for individual stocks or futures, stock sector rotations, or broad indexes like the S&P, Dow, and the Russell, VantagePoint can easily compile that data. The market does not know what do with itself this morning. So, I will entertain strong signals provided by VantagePoint to either the upside or downside today.  Let’s consider AstraZeneca (AZN).

image of AZN stock trading diary with VantagePoint
VantagePoint recently indicated a potential downside breakout in AZN due to a bearish crossover on 4/16/18.

Chart Interpretation

Using the predictive indicators embedded within the VantagePoint platform and its predictive AI technology, we will point out three significant things.

  1. We have a bullish crossover indicated by the blue predictive indicator line crossing below the black simple moving average on 4/16/18.
  2. We can combine that with the VantagePoint propriety neural index indicator moving from the GREEN to the RED position on 4/13/18. This indicator measures strength and weakness for a 48-hour period, in this case, weakness.  The move to the RED position further makes the case for a potentially bearish scenario.
  3. The predicted high and low for today’s range is below the actual high and low from yesterday’s session.

Because of these important elements, VantagePoint is indicating a bearish trend in AZN stock.

Strategy Discussion

If one were a straight stock trader, simply selling AZN stock in the $35.75 area could prove to be prudent. You are anticipating a move to the downside. It’s also a conservative way to enter AZN without the limitation of time associated with other strategies. It would also be good practice to place a buy-stop order in the $36.35 area to mitigate potential losses.

For more active traders with a shorter investment time horizon, you can consider a setup utilizing options. Given the market conditions outlined above, taking an active, premium debit approach may be the best path to success.

The purchase of a debit put spread may be one way to approach this situation. The first thing we’d need to do is determine the target strike. This will serve as the short leg of our debit put spread.  We need three pieces of information to perform this calculation: the current price, date of expiration, and ATM implied volatility. In this case, ANZ stock yields a target strike of ~$35. You can consider the AZN April 27th  35/35.5 put spread paying $0.13. The maximum risk of this spread is the amount of premium you paid while the maximum reward is the width of this spread less the premium paid. The max risk here is $0.13. The max reward equals $0.37. This gives us a reward to risk ratio of 2.85:1.

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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