April 11, 2024 - The RightLine Report
Notes From The Editor
Maintaining perspective isn't always easy for traders. With every session bringing new developments to the market, it's important to focus on day-to-day changes. This is especially true of setups with a short-term timeframe.
The narrowed focus requires smaller chart intervals. The daily charts are used as a starting point. From there, it's not uncommon for traders to use 30-minute, 10-minute, or even 1-minute charts.
But with such a narrow focus, one risks losing sight of the "big picture." Early in my trading career I often made this mistake, and my account suffered for it. I solved the problem by making a habit of looking at larger chart intervals every day after the closing bell.
Before long I learned the value of weekly charts. The same moving average bounces that occur on the daily intervals often occur on the weekly. These set-ups provide great entry points for both swing trades and longer-term holds. Long-term trendlines and channels also jump off the screen.
Monthly charts are useful as well. One needs to pull back to the monthly interval in order to locate major pivot points that were painted on the chart years ago. These reveal reversal levels as well as areas of "historical" congestion where profit-taking is likely. This can be very helpful when gauging the potential range of price movement.
Here's to Profits,
Kent Barton
Senior Analyst
Stocks Covered Today Stock Splits
Quick List
Stock 04/11 04/11 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
------ -------- -------- -------- -------- --------------- --------
MTUS 22.11 0.13 22.44 1.32/0.66 1.2
PNTG 20.35 0.14 20.74 1.38/0.69 1.2
TRML 20.10 0.19 20.77 19.09 1.68/0.84 6.78
MXL 22.42 0.28 22.84 21.25 1.59/0.8 1.52
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 more on controlling risk go to the RightLine Risk Control System
For a glossary of terms unique to The RightLine Report go to: Glossary
Questions? Send us an email using our Contact Form.
Stocks Covered Today Stock Splits
Market Summary
Following a nearly 1% decline in the S&P 500 due to higher-than-anticipated consumer price index (CPI) inflation on Wednesday, markets rebounded on Thursday as producer price index (PPI) inflation for March came in slightly below expectations. Headline PPI stood at 2.1% year-over-year, falling short of forecasts of 2.2%, although still higher than last month's 1.6% reading.
The Nasdaq, driven by the tech sector, outperformed both the S&P 500 and Dow Jones. We've observed that the prevailing "higher for longer" interest-rate environment has exerted pressure on rate-sensitive segments such as real estate, utilities, and small-cap stocks. Conversely, sectors with substantial balance sheets and ample cash reserves, notably mega-cap technology, have shown more resilience amidst rising rates.
Treasury yields continued their ascent following Wednesday's sharp increase, marking the largest one-day yield move of the year. On Thursday, the 10-year Treasury yield climbed by 0.02% to 4.55%, reaching its peak for the year. This shift aligns with the revised expectation for Fed rate cuts, with markets now anticipating only two rate reductions starting at the September meeting.
We believe the Fed will await further evidence of easing inflation trends before considering rate cuts, especially given the forthcoming CPI inflation reports leading up to the September 18 meeting, which should provide ample data to assess the trajectory of inflation.
Apr 10, 2024 Apr 11, 2024
-------------------- --------------------
Dow 38,461.51 -422.16 38,459.08 -2.43
Nasdaq 16,170.36 -136.28 16,442.20 271.84
S&P 500 5,160.64 -49.27 5,199.06 38.42
NYSE Volume 3.85B 3.52B
NYSE Advancers 414 1,415
NYSE Decliners 2,434 1,379
Nasdaq Volume 5.32B 4.73B
Nasdaq Advancers 931 2,321
Nasdaq Decliners 3,360 1,885
New Highs/Lows
04/04 04/05 04/08 04/09 04/10 04/11
--------------------------------------------
NYSE New Highs 224 102 131 105 35 47
NYSE New Lows 16 31 16 8 46 28
Nasdaq New Highs 170 78 112 98 36 61
Nasdaq New Lows 100 143 89 80 187 141
Stocks Covered Today Stock Splits
TRADER'S TIP: "Under and Over"
While it's easy to under-estimate how long it takes to learn how to trade well, it's almost impossible to OVER-estimate the value of the lessons learned along the way. Remember that there's no such thing as a bad experience - so long as you learn from it and assign it a high value.
The Technical Analyst
For help with this chart, be sure to read "Understanding The Importance Of Support And Resistance"
and "Improve Your Trading With Moving Averages".
Stocks Covered Today Stock Splits
Market Calendar
ECONOMIC REPORTS AND EVENTS (all times are Eastern): MONDAY, APRIL 8 1 pm Chicago Fed President Austan Goolsbee radio interview None scheduled TUESDAY, APRIL 9 6:00 am NFIB optimism index March WEDNESDAY, APRIL 10 8:30 am Consumer price index March 8:30 am Core CPI March 8:30 am CPI year over year 8:30 am Core CPI year over year 8:45 am Fed Gov. Michelle Bowman speaks 10:00 am Wholesale inventories March 12:45 pm Chicago Fed President Austan Goolsbee speaks 2:00 pm Minutes of Fed's March FOMC meeting 2:00 pm Monthly U.S. federal budget March THURSDAY, APRIL 11 8:30 am Initial jobless claims 8:30 am Producer price index March 8:30 am Core PPI March 8:30 am PPI year over year 8:30 am Core PPI year over year 8:45 am Fed Gov. Michelle Bowman speaks 12:00 pm Boston Fed President Susan Collins speaks 12:45 pm Chicago Fed President Austan Goolsbee speaks 1:30 pm Atlanta Fed President Raphael Bostic speaks FRIDAY, APRIL 12 8:30 am Import price index March 8:30 am Import price index minus fuel March 10:00 am Consumer sentiment (prelim) April 2:30 pm Atlanta Fed President Raphael Bostic speaks 3:30 pm San Francisco Fed President Mary Daly speaks For a chart of typical Up or Down market reactions to specific major US economic reports go to: Economic Indicator Effects
Stocks Covered Today Stock Splits
TRADER'S TIP: "Concentrate on Execution"
"The last thing you should have to worry about during market hours is where the market is going, and whether to be long or short. Your strategy will tell you all of this. You should not be concerned about the news, or even if you are making or losing money. You should not be concerned with analyzing the market, always reserve this for when the market is closed.
The only thing you should be doing during market hours is concentrating on effectively executing your strategy. If you can't execute your strategy effectively, there really is no point in trading. There are two sides to trading, strategy development and trading execution. During market hours is when you should concentrate on execution and nothing else."
~ Charlie Wright, Veteran Trader and Hedge Fund Manager
Stocks Covered in This Issue
BASIC MATERIALS SECTOR
Metallus Inc. (MTUS: Basic Materials/Steel) - BULLISH BOUNCE. If you are looking for another bouncer with profits in mind, MTUS fits the bill. Shares have been in retreat-mode lately, but now this stock is in the process of bouncing from support. Currently priced at 22.11, plan to buy shares at 22.44 and use a 1.32 trailing stop. Tighten the stop to 0.66 on a 1.2 gain. Earnings Report Date: May 02, 2024. Beta: 1.52. Market-Cap: 970.415M. Optionable.
HEALTHCARE SECTOR
The Pennant Group, Inc. (PNTG: Healthcare/Medical Care Facilities) - BULLISH BOUNCE. Up-trending stocks like PNTG have a tendency to bounce their way skyward rather than travel higher in a straight line. After touching down to a moving average support level on Thursday, PNTG is poised to lift off again. To take advantage of this setup, prepare to BUY shares at 20.74 if positive price action occurs. As always, follow your entry with a trailing stop. A 1.38 trailer should work well with PNTG. Tighten it to 0.69 on a 1.2 gainer. Earnings Report Date: May 02, 2024. Beta: 2.06. Market-Cap: 610.756M. Optionable.
Tourmaline Bio, Inc. (TRML: Healthcare/Biotechnology) - SQUEEZE PLAY. Sometimes when Bulls and Bears face off in the market arena for a typical day-long battle, there is no clear winner. This is evident when the daily price range contracts to an unusually narrow state. TRML found itself in this condition on Thursday when neither buyers or sellers were able to push ahead. This setup provides traders a chance to hop on board the next breakout - whether it's to the upside or down - with little risk of loss. To do this place a BUY order at 20.77 and a SELL short trigger at 19.09. When TRML moves outside of Thursday's range, one of the orders will be filled. Once you hold a position of shares, cancel the unfilled order and place a 1.68 trailing stop. After you've got a 6.78 profit, tighten the stop to 0.84. TRML closed at 20.10 on Thursday. Earnings Report Date: May 13, 2024. Beta: N/A. Market-Cap: 515.495M. Optionable.
TECHNOLOGY SECTOR
MaxLinear, Inc. (MXL: Technology/Semiconductors) - SQUEEZE PLAY. MXL shareholders know what it feels like to be squeezed. Thursday's slim price range reveals uncertainty on both sides of the table, a situation which often resolves itself by either Bears or Bulls quickly gaining a clear advantage. The question is "who will win?" Near-term market action tell us whether we should sell short or we should buy shares instead. MXL closed Thursday at 22.42. The plan is to enter in the right direction by placing a BUY trigger at 22.84 and a SELL short trigger at 21.25. Once MXL establishes direction, place your triggered order. As soon as you are in the trade, place a trailing stop in the amount of 1.59. After you've collected a 1.52 profit, tighten the stop to 0.8. Earnings Report Date: Apr 24, 2024. Beta: 1.99. Market-Cap: 1.837B. 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.
Stocks Covered Today Stock Splits
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
---------------- ------- -------- ------- ------ -------
NOTE: The number of stock split announcments goes up during Bull markets,
and goes down during Bear market cycles. There are currently no upcoming
stock splits that meet RightLine's proprietary criteria for split ratio,
trading volume and price action.
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 in the RightLine Member's Area.
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