FAST Stock – Fastenal Trading Journal with VantagePoint

Forex stock trading

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. Fastenal, FAST Stock, in focus today…

This journal entry looks at the recent market movements of Fastenal, NASDAQ: FAST Stock

VantagePoint Trading Journal FAST Stock

Amid news that Mexico and the U.S. reached a trade agreement, which boosted investor sentiment and sent stocks flying, Canadian Foreign Minister Chrystia Freeland will travel to Washington today to continue trade negotiations. “We’ll give them a chance to have a separate deal, or we could put it into this,” President Trump declared, adding that the “simplest deal is more or less already made.” “We will only sign a new NAFTA that is good for Canada and good for the middle class,” spokesman Adam Austen replied in a statement.

*Source:  Seeking Alpha

Let’s consider Fastenal Company (Ticker: FAST):

FAST Stock

 

The VantagePoint platform recently indicated downside momentum.

Using the predictive indicators embedded within VantagePoint and its predictive AI technology, we will point out three significant things. We have a bearish crossover indicated by the blue predictive indicator line crossing below the black simple moving average on August 23rd.  We can combine that with the VantagePoint propriety neural index indicator moving from the GREEN to the RED on that same 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 potential bearish scenario. We also have the predicted high and low below yesterday’s actual high and low indicating further weakness.  I want to play the VP continued bearish indication.

Strategy Discussion

If you are strictly a stock trader, simply selling FAST in the $59.00 area is a prudent move.  You are anticipating a move to the downside.  It is always a good idea to enter a buy-stop order to mitigate potential losses.  Placing that sell-stop in the $60.00 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 put 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 FAST, that yields a target strike of ~$55.  You may want to consider the FAST September 21st regular monthly expiration 55/57.5 put spread, buying it for $0.50.  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 = $0.50 and max reward = $2.00. This means that you are getting odds of 4:1.

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 86% 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.

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