Verizon trade idea: How to play the long term trend accelerating lower

Part 1) introduction

 VolatilityMarkets suggests trend-inspired trades that capitalize on market trends.

In the short term Verizon has been decelerating higher. In the long term Verizon has been accelerating lower. With the long term trend being the stronger of the two, we propose a short trade idea with a one week time horizon.

Part 2) trade idea details

Sell $ 53,671 USD of Verizon, take profit at $ 38.5334 level with 25.0% odds for a $ 1,721 USD gain, stop out at $ 40.5517 with 50.0% odds for a $ 1,000 USD loss.

The BoxPlot below outlines the take profit and stop loss level placement of the trade idea, the inter-quartile range of expected traded outcomes, as well as the best and worst case scenario on the whiskers.

Scenario Analysis:

There is a 25.0% probability that the take profit level will independently trade over the 1w timeframe.

There is a 50.0% probability that the stop loss level will independently trade over the 1w timeframe.

There is a 37.5% probability that neither the stop loss level nor take profit level will independently trade over the 1w timeframe.

There is a 12.5% probability that the strategy succeeds by having the take profit level touch and the stop loss level not touch over the 1w timeframe.

Part 3) VZ trend analysis

VZ last price was $ 39.81. The long term trend accelerating lower is stronger than the short term trend decelerating higher. This trade goes short when the price was moving lower and accelerating over the past 21 days.

Price Summary

Today's last mid price was $ 39.81.

Price Changes

Over the past 21 Days, the price has decreased by -3.72% percent.

Long Term Trend Analysis:

This trade goes short when the price was moving lower and decelerating over the past 21 days.

Over the past 21 days, the price has on average been accelerating $ 0.005 per day.

Short Term Trend Analysis:

This trade goes short when the last change was higher but decelerating.

Over the last session, the price has decelerated $ -0.69.

Part 4) VZ value analysis

Over the past 21 days, the VZ price increased 7 days and decreased 14 days. For every up day, there were 2.0 down days. The average return on days where the price increased is 1.1108% The average return on days where the price decreased is -0.8145% Over the past 21 Days, the price has decreased by -3.72% percent. Over the past 21 days, the average return per day has been -0.1771% percent.

Market Skew

Over the past 21 days, the VZ price increased 7 days and decreased 14 Days.

For every up day, there were 2.0 down days.

The average return on days where the price increased is 1.1108%.

The average return on days where the price decreased is -0.8145%.

Part 5) VZ worst/best case scenario analysis

Within 1 week, our worst case scenario where we are 95% certain that this level won't trade for VZ, is $ 37.6049 , and the best case scenario overnight is $ 42.0151 . levels outside of this range are unlikely, but still possible, to trade. We are 50% confident that $ 40.5517 could trade and that $ 38.5334 could trade. These levels are within statistical probability.

Expected Range

Within 1 week, our worst case scenario where we are 95% certain that this level won't trade for VZ, is $ 37.6049 , and the best case scenario overnight is $ 42.0151 . levels outside of this range are unlikely, but still possible, to trade.

We are 50% confident that $ 40.5517 could trade and that $ 38.5334 could trade. These levels are within statistical probability.

Probability Vs Payout Chart:

This graph contrasts the percentage payout of holding a position vs the probability that the payout occurs. The red and green columns represent the probability of stopping out and taking profit and their associated payouts.

Key Takeaways:

• Price today $ 39.81.

• Over the past 21 days, the VZ price increased 7 days and decreased 14 Days.

• For every up day, there were 2.0 down days.

• The average return on days where the price increased is 1.1108%.

• The average return on days where the price decreased is -0.8145%.

• Over the past 21 Days, the price has decreased by -3.72% percent.

• Over the past 21 days, the average return per day has been -0.1771% percent.

• Over the past 21 days, The price has on average been accelerating: $ 0.005 per day lower.

• Over the last session, the price increased by $ 0.31.

• Over the last session, the price increased by 0.7787 %.

• Over the last session, the price decelerated by $ -0.69.