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 generated 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. Facebook, FB stock, is in focus today…
This journal entry looks at the recent market movements of Facebook. NASDAQ: FB
VantagePoint Trading Journal FB Stock
Facebook’s Chief Executive Mark Zuckerberg saw his net worth decline by about $5 billion Monday. Ahead of Facebook’s worst one-day decline since 2012, prompted by news that data affecting 51.3 million members was improperly shared with a political consulting firm, Zuckerberg had been busy selling stock. So far this year, he has sold nearly 5 million shares.
Disposing of those FB stock shares before Monday ended up saving about $40 million, according to Securities and Exchange Commission filings and MarketWatch. At Monday’s close, the 4.9 million shares Zuckerberg has sold this year under a predetermined plan would be worth $855 million. Zuckerberg made about $900 million selling those shares.
You can have the ability to save money in your trading as well. A tool like VantagePoint generates forecasts of market movement 1-3 days in advance with up to 87.4% accuracy. We can use the artificial intelligence forecasting software to analyze markets at all levels. This morning we visited Facebook (NASDAQ: FB). Here’s the chart:
The VantagePoint platform recently indicated a potential downside breakout in FB could be forming due to a bearish crossover on 3/16/18.
Using the predictive indicators in VantagePoint powered by AI, we will point out two significant things. We have a bearish crossover indicated by the blue predictive indicator line crossing below the black, simple moving average on 3/16/18. We can combine that with the VantagePoint propriety neural index indicator moving from the GREEN to the RED position that trading day. This indicator measures strength and weakness for a 48-hour period. In this case weakness. The move to the RED position further makes the case for a potentially bearish scenario. That’s why one could consider entertaining a setup to the downside.
Strategy Discussion
If one were a straight stock trader, simply selling FB stock in the $170.00 area could prove prudent. You are anticipating a move to the downside. It’s also a conservative way to enter FB without the limitation of time associated with other strategies. It would also be good practice to place a buy-stop order in the $176.00 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.
The purchase of a debit put spread may be one way to approach this situation. The first thing that you want to determine is your target price. You need three pieces of information to complete this calculation: current price, expiration date and at-the-money volatility for that timeframe. This calculation yields a target price of approximately $163.00. One could consider the potential opportunity of the March 29th weekly expiration 162.5/165 put vertical paying $0.60. This has a maximum risk of what you paid for the spread, or $0.60. The maximum reward is the width of the spread less any premium paid or $2.50 – $0.60 = $1.90. This gives us a reward to risk ratio of 3.17:1.
Given the trading and market environment outlined above, a trader must evaluate his or her own reward/risk ratio and tolerance.
Use smart software to your advantage
VantagePoint Software uses the power of Artificial Intelligence, which traders use to predict market direction and strength 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. Not 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.
