Market Overview

Whirlpool Looks Primed For A Technical Breakout


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. 

Investors are on the lookout for a funding bill that would avoid a government shutdown on Friday stemming from fallout from the DACA deal. It’s quite possible that we could be faced with a short-term shutdown in our Federal government.

To avoid a shutdown in our trading account, we can use the artificial intelligence forecasting software VantagePoint to analyze markets at all levels. Today, we will focus our efforts on Whirlpool Corporation (NYSE: WHR).

The VantagePoint Trading Journal On Whirlpool


The VantagePoint platform recently indicated that a potential upside breakout in Whirpool could be forming due to a bullish crossover on Jan. 11. As seen in the chart above, the blue line (a predictive moving average) crossed over the black line (a simple 10-day moving average). 

This bullish crossover occurred just days after news that Whirlpool announced a partnership with Honeywell International Inc. (NYSE: HON) to expand its capabilities with Honeywell's Connect Home unit, and that they'd be shutting down a plant in Italy. 

Strategy Discussion

For active traders with a short time horizon, the purchase of a debit call spread may be one way to approach this situation. Due to the implied volatility in WHR, a target price of $184 could make sense. From that target, we observe that the weekly Jan. 26th 180/185 call spread is trading $1.05. This will yield a risk-reward ratio of 2.81:1. This ratio is calculated by taking the width of the target range of the spread less any premium paid (4.00 – 1.05 = 2.95) and then dividing that number by the amount of premium paid ($1.05).

Of course, you must evaluate whether this reward/risk ratio is appropriate for his/her risk tolerance.

VantagePoint is an editorial partner of Benzinga


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