JWN 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. Nordstrom, JWN stock, is in focus today…

This journal entry looks at the recent market movements of Nordstrom NYSE: JWN

VantagePoint Trading Journal JWN Stock

Following breakout Q1 results from General Electric (NYSE: GE) and Honeywell (NYSE: HON) on Friday, earnings from the industrial sector are kicking into high gear. The market is looking to ride those coattails and soar. I want to take advantage of any strong opportunities that the VantagePoint platform affords us.

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. Today, I am concentrating on Nordstrom’s (NYSE: JWN):

image of JWN stock trading diary with VantagePoint
VantagePoint recently indicated a potential upside breakout in JWN stock due to a bullish crossover on 4/23/18.

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 4/23/18.
  2. We can combine that with the VantagePoint propriety neural index indicator moving from the RED to the GREEN position on 4/20/18.  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 providing a bullish indication for JWN stock.

Strategy Discussion

If one were a straight stock trader, simply buying JWN stock in the $48.50 area could prove to be prudent. You are anticipating a move to the upside. It’s also a conservative way to enter JWN without the limitation of time associated with other strategies. It would also be good practice to place a sell-stop order in the $47.00 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 an active, premium debit approach may be the best path to success.

Tthe purchase of a debit call spread may be one way to approach this situation. The first thing to do is determine your target strike. This will serve as the short leg of our debit put spread. We need three pieces of information to perform this calculation. We need the current price, the date of expiration and ATM implied volatility. In this case, JWN stock yields a target strike of R52.50. You can consider the JWN May 18th Regular Expiration 50/52.5 call spread paying $0.65. The maximum risk of this spread is the amount of premium you paid and the maximum reward is the width of this spread, minus the premium paid.  The max risk = $0.65 while the max reward = $1.85. This provides 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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