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. CHTR in focus today….
This journal entry looks at the recent market movements of Charter Communications. NASDAQ: CHTR.
VantagePoint Trading Journal CHTR
As we noted earlier this week, the potential bullish steam has lost much of its strength. We do not think that this is a watershed moment with any significant downside, but the market is holding firm. We can assume it’s because of anticipation of quarterly earnings reports focusing on the financial sector who begin to report early next week. This makes it hard to take any type of bull play.
Using the powerful tools at our disposal, we can analyze individual stocks, futures or ETFs using the VantagePoint platform and its artificial intelligence predictive indicators to find markets with trends that have just started. Let’s look at Charter Communications (CHTR):
The predictive indicators in VantagePoint point out two significant things we want to know before entering this market. The first is the occurrence of a bearish crossover on 10-11 as we see the blue predictive moving average line crossing below the simple 10-day moving average black line. We also see the propriety VantagePoint neural index indicator moving from the one (1) to the zero (0) position. This indicates weakness over the next 48 hours in a market with a recent bearish crossover; two ideal signs that indicate a potential opportunity to make some profits on a new trend.
If we looked at this as a straight stock trader, shorting CHTR in the $355.00 area and anticipating continued moves to the downside could prove prudent. This would be a conservative way to enter CHTR without the limitation of time associated with other trading strategies. We’d also want to protect any potential losses, so a stop order in the $365 area would also be a strategy we’d consider.
If one were considering an options play, there could be some advantages as well. It should be noted, implied volatility is trading at the higher end of the spectrum for CHTR with 30-day implied volatility trading in the 30%.
Elevated levels of implied volatility mean more premium to potentially collect. We don’t want to leave ourselves at risk for an undue amount of time. So, we’d consider regular October monthly options. Selling the October 360/362.5 call spread could prove to be an astute play as it is trading approximately $1.00 right now. The maximum gain in selling this spread is the $1.00 of premium we collect. The maximum loss is the width of the spread ($2.50) less premium collected ($1.00) or $1.50. In this case, we are laying odds of 1.5:1. If CHTR is below $360 at expiration, we collect our entire premium while the breakeven price is $361.00 (360 + 1.00).