DE 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. John Deere, DE stock, is in focus today…

This journal entry looks at the recent market movements of John Deere NYSE: DE

VantagePoint Trading Journal DE Stock

According to the Bureau of Labor, total nonfarm payroll employment increased by 164,000 in April. This caused the unemployment rate to edge down to 3.9 percent. This should have a positive effect on the markets with a markets loking to ride this positive news to the upside as long as it can.

To ensure we select the markets with the most favorable conditions, we turn to VantagePoint. VantagePoint 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. Today, I’m looking for bullish opportunties. So, let’s look at John Deere NYSE: DE.

DE stock trading diary with VantagePoint
VantagePoint recently indicated a potential upside breakout in DE due to a bullish crossover on 5/3/18.

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 above the black simple moving average on 5/3/18.
  2. We can combine that with the VantagePoint propriety neural index indicator moving from the RED to the GREEN position 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 potential bullish scenario.
  3. We see that the predicted high and low for today’s range is above the actual high and low from yesterday’s session.

Because of these important elements, VantagePoint is proving a bullish indication for DE stock.

Strategy Discussion

If one were a straight stock trader, simply buying DE stock in the $137.00 area could prove to be prudent. You are anticipating a move to the upside. It’s also a conservative way to enter DE without the limitation of time associated with other strategies. It would also be good practice to place a sell-stop order in the $135.00 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 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 collect as much premium as possible while adhering to your risk tolerances and protocols. You can consider the DE May 11th weekly expiration 135/136 put spread collecting $0.45. The maximum reward of the spread is the amount of premium you collected. The maximum risk is the width of this spread, less the premium collected. We calculate the maximum risk to be $1.00 – $0.45, which equals 0.65. The max reward is $0.45 which gives us a risk to reward ratio of 1.44:1.

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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