Notes From The Editor

Bouncing markets can sometimes make traders feel like the payload end of a yo-yo. During such times the average daily range of the S&P 500 can quickly shift up to multiples of the "normal" amount. This type of trading action requires a double-barrel strategy:

#1 - Control Risk. It's the single most important aspect of trading. In fact, Risk Control can't be overstated. Most folks have no clue that a simple tool like the RightLine Risk Control System offers an extremely powerful way to protect against losses and increase profits.

Though intelligent risk management won't turn a really bad trading system into a winner, it will help keep losses under control until a trader develops the skills needed to maneuver the markets successfully.

#2 - Trade Both Sides of The Market. Attention all traders and investors ... it's as easy to go short as it is to go long. Any downtrend in the major indices offers short traders lower risk opportunities than would typically exist during clearly defined uptrends.

Shorting lets you make money from investor fears about credit markets, Fed rates, a bad economy and every other type of media driven chaos.

Note: Volatility is predictable in the sense that it tends to expand until it reaches a highly excited and agitated state, then contract until things become very calm. These repetitive cycles exist in every time frame from just a few hours to weeks and months, or even longer.

Trade well,

- Thomas Sutton, Editor

Quick List

    
Stock     05/21     05/21      Buy      Short   Trailing Stops     Gain 
Symbol    Price      +/-      Entry     Entry   Initial/Tighten   Amount 
------  --------  --------  --------  --------  ---------------  --------

HGV       20.51      0.04     21.09     19.44        1.65/0.82      2.34
FCBC      20.28     -0.19               19.61        1.48/0.74      2.54
ZTO       32.45     -1.83     33.07                  3.84/1.92      1.70
WRE       20.58     -0.10               19.83        1.37/0.69      1.62

The "Quick List" provides a brief summary of each stock write-up and should be taken in the context of the related write-up presented in the "Stocks Covered in This Issue" section of this Report.

Be sure to read "How To Use The RightLine Quick List" and always use the RightLine Risk Control Calculator before entering any position. For access to the Risk Calculator, go to http://www.rightline.net and login to the Member's area.

For more on controlling risk go to the RightLine Risk Control System

For a glossary of terms unique to The RightLine Report go to: Glossary

Problems? If you have any difficulty viewing this report in your email go to this page where you will find a list of items that may affect normal viewing within your email client.

Questions? Send us an email using our contact form at: http://www.rightline.net/home/contact.html

Market Summary

Stocks closed lower on Thurday despite economic reports showing improvements in global manufacturing and services. Other related news showed Leading Indicators and existing home sales for April declining by smaller amounts than expected. In equities, Best Buy (BBY $78) topped earnings expectations but decided not to issue full-year guidance, while Take-Two Interactive Software (TTWO $138) posted strong results for the quarter and offered mixed guidance. Starbucks (SBUX $78) announced it has regained about 60-65% of prior year USA store sales, with progress in Chinese sales at about 80% of last year's levels. Gold declined, oil and the USD/dollar were up slightly, treasury yields finished the session near even.

                        May 20, 2020           May 21, 2020   
                  --------------------   --------------------
Dow                    24,576  +369.04        24,474  -101.78
Nasdaq               9,375.78  +190.67      9,284.88   -90.90
S&P 500                 2,972   +48.67         2,949   -23.10

NYSE Volume                      5.04B                  5.09B
NYSE Advancers                    2361                   1542
NYSE Decliners                     587                   1395

Nasdaq Volume                    4.30B                  3.76B
Nasdaq Advancers                  2600                   1325
Nasdaq Decliners                   686                   1909

                                 New Highs/Lows

                   05/14  05/15  05/18  05/19  05/20  05/21
                 --------------------------------------------
NYSE New Highs        15     29     45     28     34     30
NYSE New Lows        104     17      8      9      7      6
Nasdaq New Highs      22     58    107     71     88     58
Nasdaq New Lows      114     22     11     11     15     13
   

TRADER'S TIP: "Big Day, Small Gain?"

It can be easy to think you are the only one not raking in huge profits when your stocks don't move up dramatically on a big market rally day. Rest assured this is not true. Many traders talk when they're winning, yet you won't hear a peep out of the same bunch when they're losing. This can make it seem like everyone else is trading better than you. That's an illusion. Don't worry about performance during any one session. Remind yourself that you're in this for the long haul. Keep any losses reasonable, stay in the game, and you'll make it fine.

The Technical Analyst

For help with this chart, be sure to read "Understanding The Importance Of Support And Resistance"
and "Boost Your Profits With Moving Averages".

S&P 500 - 2948.51 May 21, 2020

52-Week High: 3393.52
52-Week Low: 2191.86
Daily Trend: UP
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 3217.08
Resistance 2: 3037.90
Resistance 1: 2950.80
Pivot: 2858.72
Support 1: 2771.61
Support 2: 2679.53
Support 3: 2500.35


NASDAQ Composite - 9284.88 May 21, 2020

52-Week High: 9838.37
52-Week Low: 6631.42
Daily Trend: UP
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 10081.67
Resistance 2: 9535.96
Resistance 1: 9275.26
Pivot: 8990.25
Support 1: 8729.55
Support 2: 8444.54
Support 3: 7898.83
        
Dow Industrials - 24474.12 May 21, 2020

52-Week High: 29568.57
52-Week Low: 18213.65
Daily Trend: UP
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 26803.98
Resistance 2: 25211.51
Resistance 1: 24448.46
Pivot: 23619.04
Support 1: 22855.99
Support 2: 22026.57
Support 3: 20434.10
 

Market Calendar

ECONOMIC REPORTS AND EVENTS (all times are Eastern):    

Monday, May 18, 2020:
18-May  8:30 am   NAHB home builders index

Tuesday, May 19, 2020:
19-May  8:30 am   Housing starts (annual rate)
19-May  8:30 am   Building permits (annual rate)

Wednesday, May 20, 2020:
20-May  10 am   Advance services

Thursday, May 21, 2020:
21-May  8:30 am   Initial jobless claims
21-May  9:45 am   Markit manufacturing PMI (flash)
21-May  9:45 am   Markit services PMI (flash)
21-May  10 am   Existing home sales (annual rate)
21-May  10 am   Leading economic indicators

Friday, May 22, 2020:
22-May          None scheduled



For a chart of typical Up or Down market reactions to specific major US economic reports 
go to:  Economic Indicator Effects

TRADER'S TIP: "Let The Trade Come To You"

It rarely pays to chase a stock, so don't chase it - let the trade come to you. You have two options when you realize a move is already underway. Either forget the trade and look for another one, or wait for the price to move back to support or resistance THEN enter on the rebound. Waiting for a pullback usually provides a relatively low risk entry - because you can place a tight stop just beyond the support or resistance level. Remember - don't worry if you miss a trade, there is always another.

Stocks Covered in This Issue

CONSUMER CYCLICAL SECTOR

Hilton Grand Vacations Inc. (HGV: Consumer Cyclical/Resorts & Casinos) - SQUEEZE PLAY. Trader indecision has put HGV squarely in the center of a Bull versus Bear standoff. This tight spot should soon give way to a clear winner in the short-term, and we want to be in position for the move. To do that we've set a BUY entry at 21.09 and a SELL short entry at 19.44. Now it's up to HGV to show us which entry will be filled. Once the trade is underway place a 1.65 trailing stop, which can be tightened to 0.82 after you achieve a 2.34 profit. HGV closed on Thursday at 20.51. Earnings Report Date: Jul 30, 2020. Beta: 2.29. Market-Cap: 1.743B. Optionable.

FINANCIAL SERVICES SECTOR

First Community Bankshares, Inc. (FCBC: Financial Services/Banks-Regional) - BEARISH U-TURN. FCBC's reaction after running into moving average resistance on Thursday sets up this stock for a Bearish U-Turn trade. Having spent the past few days of moving higher, FCBC is now likely to revert back to its dominant weekly downtrend. Get ready to SELL short shares if FCBC drops to our entry at 19.61. Once in the trade, place a 1.48 trailing stop, which should be tightened to 0.74 after a 2.54 profit. FCBC closed Thursday at 20.28. Earnings Report Date: N/A. Beta: 0.64. Market-Cap: 358.97M. Optionable.

INDUSTRIALS SECTOR

ZTO Express (ZTO: Industrials/Integrated Freight & Logistics) - NEW HIGH DIP. ZTO's recent new 52-week high proves just how well this stock is performing. Sellers have pushed prices down the past few sessions, but Thursday's rebound near support has given us an excellent BUY setup. A continuation of this latest bounce has the potential to push above the recent 52-week high and set a new one. Be ready to get on board if ZTO moves up to the 33.07 level, and set a 3.84 trailing stop to control risk. Tighten the stop to 1.92 when you have banked a 1.70-point gain. Earnings Report Date: Aug 13, 2020. Beta: 0.32. Market-Cap: 25.437B. Optionable.

REAL ESTATE SECTOR

Washington Real Estate Investment Trust (WRE: Real Estate/REIT-Office) - BEARISH U-TURN. During Thursday's trading action, WRE encountered solid resistance near its 50 EMA (Exponential Moving Average) and looks ready for a possible reversal. The resulting Bearish U-Turn set-up is the basis for a potential SHORT play, so get ready to enter a position in WRE on a further decline to our trigger at 19.83. Set a 1.37 trailing stop, tightening to 0.69 on a 1.62 gain. WRE ended the latest session at 20.58. Earnings Report Date: Jul 23, 2020. Beta: 0.84. Market-Cap: 1.694B. Optionable.

IMPORTANT: Before entering any positions, always use the Risk Control System to determine the level of acceptable risk and the maximum number of shares to buy. Use Gap Adjusted Entries to reset the Entry Price for stocks that gap beyond recommended entry levels.

Stock Splits

Below are the stocks that have announced splits and have recently executed or will execute soon. There is generally a return to normal price behavior in the weeks following a split announcement in what we call a "Dormancy Phase." As the stock nears its split execution date (Effective Date) it often moves into the "Pre-Split Run" stage where quick and sometimes dramatic gains can occur.

                             Announce     Eff.       Split
Company Name     (Symbol)      Date       Date       Ratio   Options  
---------------- -------     --------    -------     ------  -------   

Currently there are no upcoming stock splits on the major US exchanges.
    

Split details are also available online at the RightLine Online Stock Split Calendar. For a detailed look at the different stages of a Stock Split, Click Here.

A simple yet powerful tool, the Risk Control Calculator helps you manage risk by recommending a maximum number of shares to purchase. Available to all RightLine subscribers. For access, go to http://www.rightline.net and login to the Member's area.

Disclaimer

The RightLine Report is an information service for investors and traders. It is not a solicitation nor a recommendation or offer to buy or sell securities. The information provided is obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. The publishers of The RightLine Report are not brokers or financial advisors, and are not acting in any way to influence the purchase or sale of any security. Stock picks, entry points and exit points should be considered an information resource to assist the trader in developing a trading plan and it is the sole responsibility of the reader to conduct his or her own due diligence before executing a trade. Trading securities should be considered speculative with a high degree of volatility and risk.

The publishers of The RightLine Report recommend that anyone trading securities should do so with caution, exercise prudent trading discipline and have a personal risk management strategy in place before doing so. It is possible at this or some subsequent date, the publishers and staff of The Pro Right Line Corp. may own, buy or sell securities presented. The Pro Right Line Corp. is not a financial advisory service. Its publishers, owners or investors, are not liable for any losses or damages, monetary or otherwise, that result from the content of The RightLine Report. Past RightLine Report performance may not be indicative of future performance.

All subscriptions and/or use of the RightLine.net website are subject to RightLine's "Terms of Use" and "Subscriber Terms & Conditions" which are posted at www.rightline.net.

Any REDISTRIBUTION of the above information, without The RightLine's written consent, is STRICTLY PROHIBITED.

Copyright / The Pro Right Line Corporation - All Rights Reserved

Click Here To Unsubscribe