There May Be A Buying Opportunity In Xilinx

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 and ETFs. 

This entry looks at Xilinx, Inc. XLNX.

The VantagePoint Trading Journal On Xilinx

The Dow, Nasdaq 100, S&P 500, and Russell 2000 indexes are all on pace to close higher on Thursday for the first time all week. That typically bodes well for tech stocks like Xilinx. Here's a chart going back four weeks. 

The black line is a simple 10-day moving average. The blue line is a predictive moving average indicator that forecasts where the 10-day moving average will be in 1-3 days. 

Note the crossover between the two lines on December 15. Any crossover between the two lines indicates the trend is changing. The crossover on Friday indicates the start of a bullish trend and a buying opportunity. As long as these two lines do not cross, the trend remains intact. 

Additionally, note the red-green bar at the bottom of the chart. That's the proprietary Neural Index indicator, which measures strength and weakness for a 48-hour period. The move to green further confirms the potential bullish scenario. 

Strategy Discussion

For active traders with a shorter investment time horizon, you can consider a setup utilizing options. Given the price action and combining it with the indicators from VantagePoint, a passive approach to the downside could prove to be sensible.

The purchase of a debit call spread may be one way to approach this situation. This can be done with three key pieces of information to identify a target price: the current price, time to expiration and at the money volatility. Those data points lead us to a $74.00 strike.

This is, of course, just one example of a potential strategy to play the stock. You should always evaluate whether this reward/risk ratio is appropriate for your risk tolerance.

VantagePoint is an editorial partner of Benzinga