Hot Stocks Outlook for the Week of

October 23rd, 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 Caterpillar (CAT), Harley-Davidson (HOG), General Motors (GM), Steve Madden (SHOO) and Carvana (CVNA)

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This Week’s Hot Stocks Outlook

Hello again traders and welcome back to the Hot Stocks Outlook for October 23, 2020. Hope you all are having an excellent week out in the financial markets and as always plenty to cover in today’s outlook. We’ll start out. We have shares of Caterpillar, we also have Harley-Davidson, Steve Madden, General Motors, and lastly Carvana here.

Caterpillar (CAT)

Caterpillar (CAT)

Starting out with shares of Caterpillar. Important to understand really all of these tools work exactly the same way. Whether we’re trading Caterpillar, Steve Madden, General Motors doesn’t matter, but what we have here with Caterpillar is daily price action. That’s how all of these indicators work is off of end of day data. Each one of those candles represents a full and complete trading day.

You’ll see right up against that daily candle, those you have a black line and also a blue line right up against the chart there. Now, that black value on the chart that is actually a simple moving average or what we refer to as the actual simple moving average. It’s a very common technical indicator and what it does is it looks back over the previous price action. Let’s say for a 10 day simple moving average, it’s going to take the last 10 close prices, add them all together, and then divide by 10.

The problem with tools like that is that they really only look at the past. They’re really just summarizing where those recent closes have come through and obviously as traders, we need to understand, well, where are prices moving, going forward?

What we’re able to do here is actually on that end of day basis, compare the value of that black line on the chart to this blue line. For that value or that number to be calculated each and every trading day, VantagePoint is useful the technology of artificial neural networks to perform what’s called, intermarket analysis. What that means is specifically for shares of Caterpillar, that technology is identified very important markets that are going to drive an influence future price of Caterpillar.

Now, some obvious things are going to pop into there, like the S&P 500, or the Dollar Index, the other major stock Indices, big ETF groups, but it’s able to find some subtle relationships between individual stocks, maybe global currencies, global futures, and commodity markets. What it’s able to do is take that information and actually generate predictions. Future price off to the right of the chart that hasn’t yet occurred, and use those predictions to actually generate this value. Whenever that blue line crosses above the black line, it’s suggesting that average prices are going to start moving higher than where they’ve been and therefore the overall trend is now up.

Now, that’s just one part of the overall prediction via that neural network process found within VantagePoint. Now, in addition to what that predicted moving average generates, you also have this indicator at the bottom of the chart where you see it goes from green to red, back to green. Again, that’s updated at the bottom right here, every single trading day.

What that indicator is doing is actually forecasting ahead short term 48 hours, as far as strength or weakness in the market. Again, utilizing that technology of neural networks but tuned to a 48 hour window, or you can think of that as a trading days. What that’s going to let you know is, again, that short-term strength or weakness in the overall trend. Lastly, you’re provided at the very right hand side of the chart, you see a predicted high and a predicted low that’s represented by this shadow candle.

What’s going to happen is those are the actual predictions for today. Well, what’s going to happen is the actual data is going to fill this spot and we can see how accurate those predictions actually are, but all traders need to understand is look, as long as that blue line’s crossing above the black line, the overall trend is up and then come in with your strategy that says, “Okay, well now I’ve got the help of tools like the neural index, that 48 hour forecast, and the predicted high and low to guide me as that trade progresses,” because you want to know, “Hey, should I stick with this trade? Should I add to my position?” All those sorts of questions that you want to answer.

We can actually see how accurate those predictions are right up against the price data. You see very early you trade lower move towards that predicted low, close a little lower, and look how these predicted highs and lows adapt and say, “Okay, we’ll expect the next trading day for shares to trade a little bit lower.” You see you gap down here, but immediately trade higher. You see another day here, we were hitting that predicted low. You’re not going to hit the predicted low every single day, but it is going to make you aware of, okay, well, where’s a good level to actually go ahead and accept prices? Of course, what direction should I even be looking to trade the market?

We see here a really nice rally here in shares of Caterpillar. Over the entirety of this move here, you’ve got about a 15% rally from these early predicted lows that have come through over the past 14 trading days. With again, multiple entries along the way where you may be adding to that position with those profits you’ve been accumulating.

Really nice move, as shares move higher here over the past, really about few weeks of trading in Caterpillar, we can move forward to Harley-Davidson.

Harley-Davidson (HOG)

Harley-Davidson (HOG)

It’s the exact same approach. You see, very similar time period. We have a lot of markets starting to move higher. The blue line, very strong cross between that blue and black line. What it’s telling you is that average prices, at least in this stock, are going to start moving higher. What we’re able to do is actually run scans to identify when those fresh crossovers are happening. When that predicted moving average crosses above the actual moving average, and that’s going to help you identify new trading opportunities.

Again, if you look at the duration of this move, you’ll see that well, what happens? You have a lot of strength from the neural index early, a little weakness from the neural index over this time period, but that blue and black line are still separated and saying, “Look, the overall trend is up, therefore look for some potential weakness over that time period, but a good time to come in and look to buy down at predicted low levels.”

Of course, some really nice entries very early in this move and overall, I guess you’ve seen about one, two, three, four, five entries from those predicted lows and obviously consistently moving higher towards the subsequent predicted high levels. Really nice move here in shares of Harley-Davidson. About a 20% rally, again in just the past 14 trading dates.

You have seen Caterpillar, Harley-Davidson, a lot of these similar like General Motors, we’ll take a look at. Turn higher, move forward, and you want to know, “Okay, well, where can I come in and scoop up those shares?”

Steve Madden (SHOO)

Here are shares of Steve Madden. Again, right at the beginning of October, we have this crossover to the upside, neural index bullish here. Now, you’ll see this day, like the neural index it has a high accuracy of about 87, 88%, pretty much between 80 and 87% on just about any market that you’re going to look at. Again, what it’s forecasting is very short term.

Steve Madden (SHOO)

You see early that you get a neural index bearish here. We immediately move higher, but over the course of this, you see it’s correct here, correct here, correct here, correct here, here it’s forecasting some weakness over the next couple of days. You’re getting that extremely accurate short-term strength or weakness, but still staying attuned to the overall trend and direction as far as, “Hey, do I want to be getting long here, short here?”

Of course you get those changing predicted levels every single day. Those predicted highs and lows that are going to inform you and say, “Okay, well, if you’re hanging out down at these predicted lows, which oftentimes market’s going to spend very little time down at those levels, you want to have those limit orders waiting.”

Again, you see the market overall trend moving higher, but about six, seven entries as that trade progresses and Steve Madden, again, still looking very strong in that uptrend. Overall about a few weeks of trading here, but you’ve had shares up over 15% in the past 14 trading days.

When you start to see a lot of similar markets, we have at least here, Caterpillar, Harley-Davidson, General Motors. A lot of these things turn up at the same time and really highlights that, hey, there’s some real opportunities. Some areas in the markets are doing well. Well, figure out what those areas are and then go in and look to trade and manage those over the subsequent a few weeks you might be evolved in a swing trade.

General Motors (GM)

General Motors (GM)

Here’s General Motors, very similar here. We have a crossover to the upside, neural index bullish here. Again, you see this neural index where it gets bearish here, or therefore it’s got wrong here, the market does move higher, but very early on. Saying, “Look, expect some weakness over these next couple of trading days, but the overall trend is still up.” It’s a perfect opportunity. It says, “Look towards these subsequent predicted lows, try to get a good price for that weakness that’s coming through over the next couple of trading days, but you clearly want to be long here.”

You see as that trend continues, you’re getting in at that very lower point, but then as that trend continues, things really bouncing and moving dramatically higher here. General Motors, seeing a really nice rally here recently. Shares up over 20% about 19.77% in the past 14 trading days.

Carvana (CVNA)

Carvana (CVNA)

Lastly, your Carvana. One of these areas that’s not performing well where you don’t want to get caught up in chasing any sort of strength at all over this time period, but we see this crossover to the downside on early October. Saying, “Look, this trend is now lower. You may see some strength coming through over these subsequent 48 hour periods, but the blue line still below the black line,” and you’d only want to short the market, take profits on shorts. We can again see how effective those predicted highs and lows are.

You see, especially in markets moving lower, you sometimes get these sharp spikes higher, but overall, you just want to remain short here and keep expressing that directional bias on the market. We see shares of Carvana, definitely softening up more aggressively here recently, but over the past few weeks down about 12% over the past 11 trading days.

Again, some really nice trading opportunities are out there. You see a lot of these markets, Caterpillar, Harley-Davidson, General Motors, all these things moving up at around the same time. In just the past couple of weeks, seeing a lot of strength in some of these areas of the market, but of course you want that guidance. That’s going to say, “Hey, look, go ahead and get long, but hey, expect some weakness here.”

This is where things like this are really effective. Where you expect that weakness, there’s a gap down, you’ve got your predicted low hanging down there, and you understand that, let the daily volatility come through, see how things are at the end of the day, and get involved early on a lot of those trending moves.

Once again, this has been our Hot Stocks Outlook for October 23, 2020. Thank you all for watching. Best of luck out there and bye for now.