HES 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. Hess Corp., HES stock, is in focus today…

This journal entry looks at the recent market movements of Hess Corp. NYSE: HES

VantagePoint Trading Journal HES Stock

Equity markets are under pressure amid news that President Trump will sign a memorandum “targeting China’s economic aggression.” Tariffs on Chinese imports worth as much as $60B could be unveiled, stoking fears of a global trade war.

With the volatility turned up to 11, it’s important to have a tool that can help you navigate this tumultuous time. 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.

The broad markets were trading down about 1.5% across the board in mid-day trading. Hess Corp., HES stock, is down only about 1/3%. This relative strength makes a bullish indication even more enticing. Here is the chart:

image of HES stock trading diary with VantagePoint
VantagePoint recently indicated a potential upside breakout in HES due to a bullish crossover between 3/20/18 and 3/21/18.

Using the predictive indicators embedded within the VantagePoint platform and its predictive AI technology, we will point out two significant things. We have a bullish crossover indicated by the blue predictive indicator line crossing above the black simple moving average between 3/20/18 and 3/21/18. We can combine that with the VantagePoint propriety neural index indicator moving from the RED to the GREEN position a day earlier. This indicator measures strength and weakness for a 48-hour period. The move to the GREEN position further indicates strength and makes the case for a potential bullish scenario. Additionally, we see that the predicted high and low for today’s range is above the actual high and low from yesterday’s session.  That’s why one could consider entertaining a setup to the upside.

Strategy Discussion

If one were a straight stock trader, simply buying HES stock in the $50.25 area could prove to be prudent. You are anticipating a move to the upside. It’s also a conservative way to enter HES without the limitation of time. It would also be good practice to place a sell-stop order in the $48.75 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 call spread may be one way to approach this situation. The first thing that you want to determine is your target price. You need three pieces of information to complete this calculation; the current price, expiration date and at-the-money volatility for that time frame. This calculation yields a target price of approximately $52.50. One could consider the potential opportunity of the March 29th weekly expiration 51/52.5 call vertical paying $0.40. This has a maximum risk of what you paid for the spread, or $0.40. The maximum reward is the width of the spread less any premium paid or $1.50 – $0.40 = $1.10. This gives us a reward to risk ratio of 2.33:1.

Given the trading and market environment outlined above, a trader must evaluate whether this reward/risk ratio is appropriate for his/her risk tolerance.

image of vantage point software banner


Leave a Reply

Your email address will not be published. Required fields are marked *

Translate »