Hot Stocks Outlook for the Week of
August 14th, 2020
The Hot Stocks Outlook uses VantagePoint’s market forecasts that are up to 87.4% accurate, demonstrating how traders can improve their timing and direction. In this week’s video, VantagePoint Software reviews forecasts for Best Buy(BBY), United Parcel Service(UPS) Federal Realty Investment Trust (FRT), Lennar Homes(LEN) and D.R. Horton (DHI).
This Week’s Hot Stocks Outlook
Hello, again traders and welcome back to the Hot Stocks Outlook for August 14th, 2020. Hope you’re all having an excellent week out in the financial markets and as always, planning to cover in this week’s outlook. So we’re going to go ahead and start out with shares of Best Buy, we’ve also got UPS, which we’ve looked at a couple of times over the past month or so, Federal Realty Investment Trust, and lastly, a couple of the home building stocks, which we also looked at over the past week here.
Now, starting out with shares of Best Buy, is a really good example of how all of these tools work together. So you’ll notice that right up against all that price data, there is a black line and also a blue line. Now what that price data is, is that is end of day data. So each one of those candles represents a full and complete trading day. You see, we’re going back to about July 15th here and right up against that data, you’ll notice that there is a black line and also a blue line.
Now, that black line that you see there is a regular simple moving average. So very common technical indicator, and it acts as a good measure of where market prices have been over a given period of time but obviously we want to understand where a price is likely to go moving forward. So what we’re able to do is actually compare that black line to the value of this blue line that you see against the chart. And that is actually a predicted moving average. So what’s going on is, Vantagepoint is utilizing its artificial neural networks to look at related markets. So other markets that are known to drive an influence in this case, the target market being Best Buy.
Now, that can be big things like the S&P 500, which can be a technology ETFs or retail ETFs, that can be global currencies, global interest rates. And it’s taking all of that information and actually generating price predictions. So things that haven’t yet occurred yet in the market and what it’s doing is actually taking those predictions and building it into the value of these indicators. So what was a lagging indicator that’s getting dragged around by past price action and whatever the most recent clues have been, this is an indicator that is actually utilizing forward-looking data and making predictions on where market prices are expected to move. So whenever that blue line crosses above the black line, it’s suggesting that average prices should start to move higher than where they’ve been. So that blue line, again, the value there being updated each and every trading day at about 6:00 PM Eastern time here.
Now, in addition to that predicted moving average, which is really a good measure of the overall trend, you’ll see at the very bottom of the chart here, you have a bar that goes from green to red, back to green, and this also gets updated every single trading day after the most recent price action. Now, what this indicator is doing is actually looking ahead 48 hours. So again, making that predictive forecast, but it’s only looking ahead two trading days ahead and looking for short term strength or weakness in the market. So that can help with trade management, really knowing what to expect as far as if this market’s in an uptrend, but going to be weak over the next couple of days, obviously very important information to have. And lastly, to really round out entirety of this forecast that you look towards the very top right of the chart here, you’ll see that there is a shadow candle there and what that is, is actually predicted high and a predicted low for the very next trading day.
So before the trading day occurs, you have a prediction of that daily range so you can set limit orders, price targets, whoever that fits into your overall trading approach. Now, what I can do here is we see that we have this blue line crossing above the black line, and what’s that saying is, again, average prices are expected to start moving higher and then you’d want to come in and use tools like that predicted high and low. Also, get that update from the neural index to let you know, okay, well over the short term, is there strength or weakness in the market? And we can actually look and see how accurate all of those predicted high and low forecast were. So if you look at this market and say, okay, well, here’s where I want to go ahead and start buying because that blue line or predicted moving average has crossed above the black line.
Well, what price levels would you want to come in and buy? Well, you see here, you get a predicted low that’s hit, not a bad intraday level to get long. You see the neural index forecasting some short term weakness, and you see, we do get some lower lows here, but again, the predicted low, not a bad place within that next 48 hours of weakness to look to add to your position. And again, you see, we eventually get that breakout and markets moving higher. You see that short term forecast improving, but then what you really want is a tool that’s going to help you manage the trading opportunity as efficiently as possible. And you see if you want to take profits on the top end, you’ve got these predicted highs coming through. If you want to add to the position, you’ve got things like the predicted low, and these are actually great days.
If you have a limit order waiting at the predicted low, you get filled right at the open and immediately trading higher, but you just see how these ranges do a good job of guiding you moving forward, and that can fit into your trading approach, whether you’re a trend trader or a short term day trader looking to take some shorter-term positions in the market, you need an accurate forecast of what is the overall trend, what is the short term forecast and what is the prediction for the daily range here.
Now, UPS, we’ve looked at this a couple times over the past month here and very similar situation. You see that with Best Buy, we have something a little bit more recent. Here with UPS, we’ve had a market that’s been in an uptrend for a long period of time. So if you’re looking for markets that are in strong uptrends, we actually have the ability to scan for that and identify markets that fit a very specific criteria.
But what you’ll notice here is that there’s going to be little dips in the market, right, where the neural index gets bearish. You see it runs sideways for a while over these periods of time, but that blue line is still above the black line. And what you can do is look at this as far as the distance between these levels, is a good indication how strong or weak that trend is. When you have a lot of separation there, it’s suggesting that you’re in a strong uptrend, average prices over the longer term will remain above that black value of where they’ve been. And again, you want to use those indicators as far as predicted highs and lows daily, to help you do some trade management. So it’s not just about getting these entries early on in a trade, but once you’re in a trade, being able to manage that effectively.
And if you can take some profit in the early goings lock-in stops at breakeven, it gives you a lot of options as how you might want to trade a trend continuation and a longer term move. And so once again, you see you get a lot of volatility, things pick up, but those predicted high and low ranges do a really good job even in that increased volatility environment where you seek an aggressive pullback, almost writes that predicted low, next day you’re trading up to that revised predicted high there. So what you really want to do is pair your trading style and approach your timeframe with the length of the indicators, right? If you’re a trend trader, you may want to look for fresh crossovers, as far as new trends developing, if you’re a day trader, you may want to look for established trends and then come in with those shorter term forecasts, like the neural index and a predicted high and low ranges that you get there.
Next opportunity here is in Federal Realty Investment Trust, and this being a lot more recent. But one of the more recent things we saw was some of the real estate investment trusts in this whole sector, start to turn a little bit higher. So what happens is, is you run that scan and you end up seeing a lot of crossovers actually come through at the same time, and generally when a whole sector is going to start improving, you see all these things coming through within a day of each other, as far as running the scans for that forecast. So here we see a very strong crossover to the upside here, but what happens is you see, you get a long sideways period, and that’s where the neural index can help you here and say, okay, well, expect some weakness over the next 48 hour periods here, right?
And this is where you get these lower dips in the market over these subsequent 48 hour periods. But that blue line is still above the black line. And what that can really allow you to do is that short term weakness in a bigger uptrend, is hold out for those lower prices. And of course we have that predicted high and low range to help us as far as saying, okay, well, what prices should I be expecting? And you see what actually happens is with these forecasts, even after this trading day, you actually get this predictive high and low forecasts, slanting lower and letting you know, hey, something’s going on in those neural networks. Actually rather than forecasting the predicted high and low range, moving higher, they’re saying, hey, there may be a little softness here. And then we go slope a little bit lower once again, but you see how the daily range, you push a little bit lower, but are closing well within that daily forecast, as far as the daily range is concerned.
So again, you see you get a little bit more sideways, predicted lows hit once again, and then that market really moves into an uptrend. So you see when that neural index straightens out, even getting gaps in the chart and that overall trend being much more aggressive as far as it’s pushed to the upside.
Now, the home builders has also done really well. And this is another example of where we’ve seen rates turn up a little bit more recently. The home builders like Pulte Homes, Lennar. Here we have DHI, have all turned up to the upside for a while here. And again, we can identify areas in the market where these strong trends are present and then go in with shorter-term approaches. You see that here we have really, since the beginning of July, very strong uptrend here, a lot of separation between the blue and the black line.
You have a couple of these areas where you get these little dips and sideways action in the market with the neural index. But the overall trend is again, still very, very bullish. And we can use that predicted high and low range to assess that, all right, well, if we’re trying to get involved in this market, as the uptrend continues, where are the intraday price levels that will allow us to really minimize the amount of risk or stop-loss, we need to run on these opportunities, but still get exposure to that upside and we see a couple of opportunities early, several opportunities here to add really at the better part of the lower part of the range there. And we’ve closed a little bit higher and have been in a very strong uptrend. You see, as that neural index gets predominantly bullish over this period, you’re getting a very strong move as the market breaks above $70 per share here.
So over the course of this move, we’ve gotten a really nice push, same thing with the other home builders here. So you see DHI up over 28% just in the past 27 trading days. 500 shares there has it close to about $8,000 in profit. Next opportunity.
Lennar, a very similar situation where we see that blue and the black line crossing really at the beginning of July. And this is what I mean by, if we run these scans, we can actually identify how the sectors are rotating, which sectors are moving into a bullish uptrend, which sectors are weakening. And that can help you really create a staggered portfolio, where you may have some longs may have some shorts, but really benefiting off where that larger move is likely to take things. So we see Lennar here, crossover to the upside, neural index bullish against some of these areas where you get that subsequent weakness over the next 48 hour periods.
But, overall trends still very bullish and wanting to come in with the help of those predicted highs and lows on a daily basis and get involved in the market. So again, we’ve got about, let’s see, six, seven, eight, nine, 10, 11 entries over the course of what’s been now about a month and a half on the calendar in the market doing extremely well here.
I also wanted to go ahead and highlight just a few of these features inside of the intelliScan here, where what we can do is like Lennar or DHI, or if you’re looking for some of these trending opportunities, we have this feature where we can actually scan for any of these predictive indicators. So if I come in and actually show the markets that we have here, we really have all the different stocks and all of these different sectors to choose from, and you can actually scan them all at once.
So if you just wanted to take a broad cross-section of the market, find specifically the opportunities that are going to fit into your trading style, this gives you the ability to do that. So let’s say we’re looking for markets that have been trending for more than seven or eight days, right, that are in pretty strong uptrends here. We also have the ability to sort by things like the sector that things are in, right? So if we want look at the category tab here, we can add and see all the different sectors that each one of these markets are in. We can look for short term strength to the upside. We can look for some longer-term trend indicators being bullish as well. And we have this big list of opportunities that we can see how many days these markets have been in trends.
So whether we want to go ahead and sort through these different categories or find again, fresh opportunities that have only crossed one day ago, we can come in and open up these markets and identify, okay, well, is this fitting into my trading style and what I’m looking to do; establish that there is a strong uptrend look for that strengthen the neural index, and then potentially look towards that predicted range to take advantage of some trading opportunities.