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. Natural Gas company EQT Corporation EQT stock is in focus today…
This journal entry looks at the recent market movements of CarMax NYSE: EQT
VantagePoint Trading Journal EQT Stock
Taking this market environment into consideration, the VantagePoint platform provides potential and direction for us. Using the artificial intelligence forecasting software VantagePoint, we can analyze individual stocks, futures or ETFs and broad indexes like the S&P, Dow, and the Russell. After utilizing our VantagePoint platform, I am open to considering a set up to the upside or the downside. Today, EQT Corporation (EQT) is in full focus. Here’s the chart:
Using the predictive indicators embedded within the VantagePoint platform and its predictive AI technology, we will point out two significant things. We have a bearish crossover indicated by the blue predictive indicator line crossing below the black, simple 10-day moving average on 12/07/17. We can combine that with the VantagePoint propriety neural index indicator moving from the one (1) to the zero (0) position. This indicator measures strength and weakness for a 48-hour period. The move to the zero (0) position further makes the case for a potentially bearish scenario. That’s why I am willing to entertain a setup to the downside.
Strategy Discussion for EQT Stock
If one were a stock trader, selling EQT stock in the $56.25 area could provide a profitable opportunity. You are anticipating a continuing move to the downside. It’s also a conservative way to enter EQT without the limitation of time associated with other strategies. In this scenario, a buy-stop order in the $58.00 area to mitigate potential losses would also be smart.
For more active traders with a shorter investment time horizon, you can consider a setup utilizing options. Given the price action, one could observe as outlined above combined with the indicators we have highlighted on the VantagePoint platform, an active approach to the downside could prove prudent.
The purchase of a debit put spread may be one way to approach this situation. The critical piece here is to identify a target price. We can determine a target price with three simple inputs. Those inputs are current price, time to expiration (expiration date), and at the money volatility for this time horizon. In this case, we will use a price of $55.80, an expiration of 1/19/18 and at the money volatility of 27.5%. This yields a target price of $51.00. We can consider the December 50/55 put vertical which is trading $1.20 at the time I am writing this. This spread has a maximum risk of $1.20. The maximum reward of the width of the spread is $5.00 less any premium paid or in this case $3.80. That gives us a reward to risk ratio of 3.17:1.
Given the trading and market environment outlined above, a trader must evaluate whether this reward/risk ratio is appropriate for his/her risk tolerance.