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, ETFs and Cryptocurrencies. American Airlines, AAL Stock, is in focus today…
This journal entry looks at the recent market movements of American Airlines, NASDAQ: AAL Stock
VantagePoint Trading Journal AAL Stock
The S&P 500 will tie the record for the longest U.S. bull market in history today at nearly 3,500 days, rising more than 320% since March 9, 2009. It’s a record few would have predicted when stocks struggled to find their footing after a 50% plunge during the financial crisis. There is still no shortage of bearish warnings out there as analysts debate the future, but many investors continue to see plenty of gas left in the tank for equities.
*Source: Seeking Alpha
Let’s consider American Airlines. (Ticker: AAL):
The VantagePoint platform recently indicated upside momentum.
Using the predictive indicators embedded within the platform and its predictive AI technology, we will point out three significant things. We have a bullish crossover indicated by the blue predictive indicator line crossing above the black simple moving average on August 17th. We can combine that with the VantagePoint propriety neural index indicator moving from the RED to the GREEN two days before. 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. We also have the predicted high and low above yesterday’s actual high and low indicating further strength. I want to play the VP continued bullish indication.
Strategy Discussion
If you are strictly a stock trader, simply buying AAL Stock in the $40.00 area is a prudent move. You are anticipating a move to the upside. It is always a good idea to enter a sell-stop order to mitigate potential losses. Placing that sell-stop in the $37.75 area will achieve that goal.
For 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.
Because of the reasons given above, the purchase of a debit call spread may be one way to approach this situation. You will first want to calculate your target strike. In order to do this, you will need three pieces of data: current price, expiration date and the implied volatility associated with that expiration date. For AAL, that yields a target strike of ~$43.50. You may want to consider the AAL September 21st regular monthly expiration 42/43.5 call spread, buying it for $0.33. The most you can lose is the premium paid and the most you can gain is the width of the spread less any premium paid. Max risk = $0.33 and max reward = $1.17. This means that you are getting odds of 3.55:1.
Given the trading and market environment outlined above, a trader must evaluate whether this reward/risk ratio is appropriate for his/her risk tolerance.
Use smart software to your advantage
VantagePoint Software uses the power of Artificial Intelligence. This is what traders use to predict market direction and strength. Which is 1-3 days in advance with up to 87.4% accuracy. With deep learning using neural networks, VantagePoint can show you what the market is going to do instead of what it’s already done. Request a personalized demonstration of VantagePoint Software today. Learn why more than 25,000 traders trust the software, which helps them achieve trading success.
