Hot Stocks Outlook for the Week of

August 7th, 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 Advanced Micro Devices (AMD) ,  Pulte Homes(PHM) PoolCorp (POOL), Snap Inc.(SNAP), United Parcel Service (UPS) and Taiwan Semiconductor (TSM).

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This Week’s Hot Stocks Outlook

Hello, traders, and welcome back to the Hot Stocks Outlook for August 7th, 2020. I hope you’re all having a great week out there in the financial markets, and as always, plenty of opportunities to cover here. So, we’re going to start out with shares of AMD. We also got Pulte Homes, POOLCORP, Snap, and actually a couple of opportunities we’ve looked at over the past few weeks in TSM and UPS.

Advanced Micro Devices

But starting here with AMD, really good example of how all of these forecasts work within the software here, but what we have with AMD is daily candles here. So, each one of these candles represents a full and complete trading day. Right up against that price data, you’ll see that there is a black line and also a blue line on the chart. Now, the black line that you see there is a regular simple moving average or what we referred to as the actual simple moving average. It’s a very common technical indicator and that it only takes the last 10 close prices, adds them all together and then divides by 10. That’s a good measure of where market prices have been.

But obviously as traders, we need to understand where our prices going moving forward. Where’s the next move taking us? And so, what we want to do is actually compare that black value that’s plotted on the chart there to this blue line that you see against the price data as well. For that value to be generated, VantagePoint is performing what’s called intermarket analysis. It’s utilizing artificial neural networks to actually produce a predicted moving average, so a forward-looking prediction of where those average prices are likely to move. So whenever that blue line crosses above the black line, it’s suggesting average prices are going to start moving higher. Now, to plot that value and actually to plot all of these indicators that you see against the chart at the bottom, also to the right here, VantagePoint is using that technology of neural networks.

AMD

Now, how this works is rather than just looking at the target market and what’s happened in the share price of that market, VantagePoint is looking at other related markets that are known to drive and influence this specific target market. So, that can be things like technology and semiconductor ETF groups. That can be individual stocks. That can be futures and commodity markets. That can be global currencies, global interest rates. It looks at all of those markets how they’re sharing positive relationships, inverse relationships, leading or lagging relationship. It uses that to actually predict future prices. So, you can think of that as data that hasn’t yet occurred off to the right of the chart and it actually builds those values into this moving average. So rather than having an indicator that’s always looking at the past and being dragged around by the most recent close price, you have an indicator that’s utilizing predictive data looking forward and actually making a forward-looking prediction.

So whenever that blue line crosses above the black line, as we see here in shares of AMD, it’s suggesting average prices are going to start moving higher. Now, at the bottom of the chart here, you’ll see that there’s another indicator that goes from green to red, back to green. This indicator is also derived via that neural network process, but it’s a very short-term indicator that it’s only looking ahead 48 hours. If you learn what this is forecasting and predicting, it actually is looking at the typical price. That actually includes volatility like the highs and the lows that are expected to come through over the next 48-hour period. It really helps you understand when there’s likely to be some short-term weakness.

So you see how the neural index goes down to a red here, you get some lower lows in the market. Again, here, some lower lows setting in, but over the duration of this tool, it’s accurate up to 87% over the entirety of its prediction. So, you’re getting a very accurate indicator across wide cross-sectional markets. It’s very good to help you manage those trading opportunities and know what to expect. If the overall trend is up, but there’s short-term weakness just over the next 48 hours, that can definitely come into play on how you want to imagine opportunity.

Now, lastly, you’re actually provided a predicted high and a predicted low. This is really where the trade management comes in and allows you to make the most of each one of these trading opportunities. You have to see that you have this tool that every single day is updating the short-term strength or weakness in the market, predicted high and predicted low levels for the next trading day. You’ve got that prediction of the overall trend and it really guides you as far as, well, what should you be looking to do in this market? So, what we can do is actually bring up the accuracy of those predicted high and low predictions, and you’ll see how this works over a series of really a few days here.

Now, you’re not going to hit that predicted low every day, but you often get very close and it offers a very good entry price if you’re looking to take action on a specific market. So, you see this has clearly been a market that’s in a strong uptrend, multiple entries early on in the trade. But even as volatility picks up, you get a good really adaption as the market does a good job or the tools here do a good job of adapting to the new volatility, setting some new levels in place and helping you get back in line, and really make the most if you need to be adding to an opportunity, taking property along the way, or just understand that you want to stick with a particular market.

Taiwan Semiconductors

Taiwan Semiconductors

Very good examples of that where we have at the end of the session here, we’ve got TSM and also UPS. We’ve looked at those markets over the past few weeks and you can see how accurate the forecasts have been since we looked at those several weeks ago. But here, in shares of AMD and also TSM and other semiconductor market here, these shares are up over 60% in just the past 22 trading days. So, a 500 share position has you up about $16,000 just over the past really month of time here, about calendar time, 22 trading days there. So moving forward, when we look at building companies, these are home builders really across the board. If you look at KB Homes and Pulte and all these different manufacturers, you get a lot of similar conditions across similar stocks. It really lets you understand, like when TSM starts moving higher, maybe you want to look at AMD or NVIDIA, or some of these other companies.

Pulte Homes

But here in Pulte Homes, the forecast works the same way, whether you’re trading one stock or the next. So, you see we get this crossover to the upside, neural index, again, letting you know that, okay, well, there may be some weakness over these next 48-hour periods, but the overall trend is still very much to the upside.

Another measure that you can do use is this distance between the blue line and the black line is suggesting that average prices are actually much higher than that lagging moving average, and that you’re in a strong established trend. You see, we get one day off here where we have a neural index bearish and we just immediately continue higher, again, very clearly that you were in a strong uptrend. You see again here where you get the neural index bearish here, some lower lows setting in, but the overall trend, still to the upside. So, you don’t want to be sacrificing the position just to understand, “Hey, there’s some weakness, maybe buy at some lower levels over that next 48-hour period.” But again, we can see, okay, well, how accurate have those predicted levels been relative to the trading days?

Pulte Homes

What happens here is this is today’s forecast, but what we ended up getting is a bar filling in and we see how accurate that predicted high and low was. It’s the same thing for all these previous days where you see we get a big move higher, market pulls back a little bit here. But, you see this predicted high and low range getting back online and saying, “Okay, well, if you want to be a buyer in this market, some good entries down at the lower end of this longer term range that you have there get to involve in the trend.” And then, you see as volatility picks and things move higher, again, really nice levels here. You’re hitting the predicted high intraday, pulling off a little bit, moving back towards the predicted lows, volatility comes in, good time to get long, adding in these levels here before the market moves higher.

But even as that volatility comes through, you see these levels doing their job. Whether it’s on the high end or the low end, you want that accurate measure that says, “Okay, well, buy at a certain price where you’re getting a good intraday level and take profit depending on the timeframe that you’re looking to trade in or how you might be managing a particular opportunity.” So again, most of the home building stocks, as well as things like lumber, obviously the market’s generally moving a lot higher here, but we’ve got a market up in just the past nine trading days of about 20%. So again, a 500 share position there has you up about $3,400.

Poolcorp

Here in shares of POOLCORP, and this is actually somewhat slower moving stock but very resilient, always seems to want to go up, but we have this crossover here saying, “Look, really at the beginning of July here is a great time to go ahead and take long positions.”

PoolCorp

Now, again, you’re going to have that neural index get bearish at times. But over the duration of this, you see that you have a very accurate forecast. It says, “This is an uptrend. Most of them time here, you’ve got a 48-hour window where the market is expected to move higher, but really the accuracy of those intraday levels.” So every single day, understanding that, “Okay, if you want to be a buyer, just wait until these predicted lows get hit.” It’s actually really effective when you have limit orders waiting to see a day like this where you gap down, you get filled at the open. Well, you’re immediately going to be trading higher from those levels. So whether you’re getting in as a beginning of the trend trader, whether you’re looking to take some short-term trades while a market’s in an existing uptrend, you’ve got this good measure that helps you say, “Okay, well, where’s a good intraday price? What’s the short-term strength or weakness? What’s the overall trend so that you can make a intelligent trading decision?”

So, you see multiple entries here are at least a half dozen or so as this market moves higher. Over the duration of this move, certainly another nice opportunity here where the market in just the past month here up 21.5%, a $28,000 move in about 500 share position, of course, whether you want to buy 50 shares, 100 shares, making a lot of money as those shares appreciate about 20% there.

SNAP

Now, we’ve got shares of Snap. And so while most of the markets have been very resilient, moving higher, there’s of course some areas where you’re not going to have these forecasts arguing that the market’s going to move higher. You see how, especially on the short side, you can get a lot of volatility, right, a lot of up and down where you get these really aggressive up moves. But, the overall trend is still very much to the downside and you wouldn’t want to get caught up in that. When you see how that predicted moving average is holding bearish there, but this neural index is letting you know, “Hey, there’s some strength over the next 48 hours, but the overall trend is still bearish. Make sure you stay short here.”

Again, you see this area here saying there’s some strength over the next 48 hours. Same thing here, but the overall trend is still very much to the downside. Again, we can look at those tools of those intraday predicted highs and lows, and you see how effective this is. After this trading day, you’re getting a projection that says, “Look, prices are looking to be higher, but the overall trend is still down.” So in the short term, look for that strength in the intraday levels, expect the market to trade up at these highs, but the overall trend is still down. You see eventually, volatility comes and that market moves much more aggressively lower. And then, we’re back to those predicted highs and lows doing their job where, again, really strong up move. But by the end of the day, you’re trading very close to that predictive high and then moving lower the next trading day, a couple more days bouncing up towards those predicted highs and closing lower there.

So, nice opportunity to potentially hedge your portfolio, take some short positions in the market. On average, this thing’s down almost 12% here just in the past 14 trading days. So again, if you want to create that hedged portfolio, get long AMD. Maybe you’ve got some older opportunities that are still trending higher, but avoid things like Snap at least over this past month here.

SNAP

I wanted to go ahead and revisit these two stocks, which we’ve looked at several weeks ago. So, we actually have a green line here drawn where we originally brought this through. I really just wanted to highlight this is when you find an opportunity that’s working or you get involved at really the beginning of the opportunity, which what’s really great about this is we have a scanning feature to identify fresh crossovers. So when things are just starting to change direction, you can recognize that and get involved. But when a trade is really starting to move, there’s enormous profit potential by taking those existing profits and managing the opportunity as the trend continues. Assuming the forecast are suggesting that that trend is going to keep moving higher, we can see how accurate all of those predictions have been.

So if you’re still looking for an area to buy into the market, well, you’re coming in down at these trading days and you see that overall trend really starts to take off. And then, you see some more of these more recently. As that volatility really cranks up, those predicted highs getting back online and offering some good guidance as hard to trade that market moving forward, even though the range has exploded in a lot of ways here.

So this market TSM, same thing as AMD, where this turned up a little bit higher, a little bit more early, but same thing. This area of the market’s doing well. Everything’s in an uptrend. Look towards those stocks and you’ve really seen some huge appreciation over the duration of the past month and a half or so. Here, we have TSM up over 44.5%, almost 45%. Again, 500 shares there on a $57 stock when the market turns to the upside, up over $12,500 here.

United Parcel Service

United Parcel Service

The other market here is UPS. So, we’d constantly bring in about four or five markets every week. You know why it’s so important to get these early entries when that opportunity begins? Because you want to have some accumulated profits by the time you get to this point that you can really use to keep managing that opportunity. So, you see another example here where the overall trend is still up. You see the market telling you, “Look, expect things to go sideways here. Right? Expect some short-term weakness over the next 48-hour periods.” But then, everything goes green, trend moves up, and obviously moves a lot higher to the upside here with multiple entries, one, two, three, four, five entries before this thing pops higher. You see even more recently over the past four days, another entry here and still moving back up towards those predicted highs in the short term. So, really nice opportunity as well here in shares of UPS.

But, many of these opportunities we’ve brought through over the past several weeks, as long as that blue line remains above the black line, you’re in an established trend, use the shorter-term tools to manage that opportunity and make the most of a really nice entry in a new trend in the marketplace. Rather than getting out of the market for some reason because your tools are starting to show some short-term weakness that gets you out of the market, look at those things in context and understand that look, the overall trend is still up. You may get some of these sideways periods as you see the neural index forecasting that weakness, but that blue line remaining above the black line and letting you know, look, the overall trend here, ready to move a little bit higher about a 36% move in just the past 34 trading days. So once again, this has been our Hot Stocks Outlook for August 7th, 2020. Thank you all for watching. Best of luck out there and bye for now.