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April 12, 2022 - The RightLine Report
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NOTES FROM THE EDITOR
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Making money in stocks doesn't have to be hard. When it comes to profits, it's not about how hard you work. It's about knowing the right things to do, and putting that knowledge to work.
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"QUICK LIST"
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Stock 04/12 04/12 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
------ -------- -------- -------- -------- --------------- --------
LXU 23.81 0.86 24.47 2.44/1.22 3.62
XPOF 22.36 -0.19 23.28 21.63 1.65/0.83 3.96
CSII 21.81 0.82 22.18 20.47 1.71/0.86 1.96
INTA 24.25 0.76 24.8 23.06 1.74/0.87 3.12
NFE 41.96 0.66 43.44 3.8/1.9 3.3
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" at https://prorightline.com/index.php/rightline-report-quick-list/. In addition,always use the RightLine Risk Calculator before entering any position. For access to the Risk Calculator, go to https://prorightline.com/index.php/risk-calculator/. To learn more about controlling risk go to the RightLine Risk Control System at https://prorightline.com/index.php/rightline-risk-control-system/ For a glossary of terms unique to The RightLine Report go to: https://prorightline.com/index.php/glossary/ Questions? Send us an email using our contact form at: https://prorightline.com/index.php/contact-us/
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MARKET SUMMARY
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US stocks were lower on Tuesday as traders responded to data showing consumer prices have risen to their highest levels since 1981. Adding to the bearish sentiment was the the ongoing Russian invasion of Ukraine, plus the expected aggressive Fed Bank tightening intended to control the rise in prices. In equities, shares of Albertsons Companies (ACI $32) and CarMax (KMX $93) were lower after KMX fell short of earnings expectations, while ACI's margins declined and the grocery/pharmacy retailer released unimpressive guidance. The USD/dollar, gold, oil and treasuries all moved higher, lowering yields. Apr 11, 2022 Apr 12, 2022
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Dow 34,308.08 -413.04 34,220.36 -87.72
Nasdaq 13,411.96 -299.04 13,371.57 -40.38
S&P 500 4,412.53 -75.75 4,397.45 -15.08
NYSE Volume 4.28B 4.12B
NYSE Advancers 1,011 1,660
NYSE Decliners 2,299 1,645
Nasdaq Volume 4.88B 4.9B
Nasdaq Advancers 1,535 2,069
Nasdaq Decliners 3,193 2,641
New Highs/Lows
04/05 04/06 04/07 04/08 04/11 04/12
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NYSE New Highs 122 71 68 117 66 90
NYSE New Lows 116 271 261 215 311 276
Nasdaq New Highs 74 57 77 81 70 72
Nasdaq New Lows 156 308 276 266 408 289
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TRADER'S TIP:
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TRADER'S TIP: "The Market is Out of Control!!" Many traders subconsciously try to control the markets by placing too much emphasis on their trade entries. This is usually an attempt to force the market to do their bidding by requiring it to meet a long list of criteria before they get in. However, once in, the market will always do whatever it wants. This is why we emphasize trade management. Keep losses small and let winners grow. The market is literally out of anyone's control! As a result, success in stocks has a lot more to do with exits than entries. **************************
THE TECHNICAL ANALYST
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This section contains important technical data for the three major market averages -- the S&P 500, the Nasdaq Comp Index, and the Dow Industrial Average. For guidance on how to use this information, go to: https://prorightline.com/index.php/technical-analyst-section-rightline-report/ S&P 500 - 4397.45 April 12, 2022 52-Week High: 4818.62 52-Week Low: 4056.88 Daily Trend: DOWN Weekly trend: UP Weekly Pivot Levels Resistance 3: 4797.41 Resistance 2: 4654.00 Resistance 1: 4571.14 Pivot: 4510.59 Support 1: 4427.73 Support 2: 4367.18 Support 3: 4223.77 https://www.prorightline.com/rlch/041222SPX.jpg--ECONOMIC REPORTS AND EVENTS (all times are Eastern): Monday, April 11, 2022: 11-Apr 11 am NY Fed median 1-year expected inflation 11-Apr 11 am NY Fed median 3-year expected inflation Tuesday, April 12, 2022: 12-Apr 6 am NFIB small-business index 12-Apr 8:30 am Consumer price index (monthly) 12-Apr 8:30 am Core CPI (monthly) 12-Apr 8:30 am CPI (year-over-year) 12-Apr 8:30 am Core CPI (year-over-year)) 12-Apr 2 pm Federal budget deficit Wednesday, April 13, 2022: 13-Apr 8:30 Producer price index, final demand Thursday, April 14, 2022: 14-Apr 8:30 am Initial jobless claims 14-Apr 8:30 am Continuing jobless claims 14-Apr 8:30 am Retail sales 14-Apr 8:30 am Retail sales excluding motor vehicles 14-Apr 8:30 am Import price index 14-Apr 10 am UMich consumer sentiment index (preliminary) 14-Apr 10 am UMich 5-year inflation expectations (preliminary) 14-Apr 10 am Business inventories Friday, April 15, 2022: 15-Apr 8:30 am Empire state manufacturing index 15-Apr 9:15 am Industrial production index 15-Apr 9:15 am Capacity utilization For a chart of typical Up or Down market reactions to specific major US economic reports, go to "Economic Indicator Effects" at this link: https://prorightline.com/index.php/economic-indicator-effects/
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TRADER'S TIP:
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TRADER'S TIP: "Small Account?" As a rule of thumb, we believe that the maximum amount a trader should put at risk on a single trade, including commissions, is 2% of their total account value. While this may seem WAY too conservative to traders with small accounts, the research indicates otherwise. However, due to the minimum transaction fees imposed by most brokers, smaller accounts have a more difficult time including commission costs within the recommended maximum risk level of 2%. Over the past few years lower commissions have helped make trading an affordable venture for many smaller players. Traders with small accounts should shop for the lowest costs - but keep in mind that while it is important to hold the cost of commissions down, good service and reliability should also be among the top considerations. Smaller traders should also try to resist the temptation to increase their exposure by ignoring the 2% risk cap. The principals underlying risk management are designed to minimize losses and give as many chances as possible for winning trades to develop. Following these guidelines will even keep a string of five or six losers from inflicting seriously damage to our trading accounts. Regardless of what size account a trader has, it's important to acquire intelligent trading habits that insure a steady progression of profits over the long haul. Substituting high-risk short cuts for reliable risk management methods usually results in a quick and expensive trip down Bust-Out Boulevard! ***********************************
STOCKS COVERED IN THIS ISSUE
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BASIC MATERIALS SECTOR LSB Industries, Inc. (LXU: Basic Materials/Chemicals) - NEW HIGH DIP. Stocks in the early stages of a bounce tend to move higher. This is especially true when a strong performer in an established uptrend dips to a well-known support level. LXU fits this model perfectly. After setting a new 52-week high a few days back, the stock dipped for several sessions due to profit taking. Now the price action is signaling there is a reversal underway. Plan to buy this dip if the bounce lifts LXU to our entry level BUY trigger at 24.47. Set a trailing stop of 2.44 and tighten to 1.22 on a 3.62 gain. LXU closed Tuesday at 23.81. Earnings Report Date: Apr 26, 2022. Beta: 1.80. Market-Cap: 2.133B. Optionable. CONSUMER CYCLICAL SECTOR Xponential Fitness, Inc. (XPOF: Consumer Cyclical/Leisure) - SQUEEZE PLAY. In certain stocks a tightly constricted price range is a sign that neither bulls nor bears are confident of winning in the near term. This often means that the side that gives up first causes a quick move in the opposite direction. In these fear dominated skirmishes, opposing traders always benefit from the retreat. In the Squeeze Play setup you can actually play both sides of the inevitable surge. XPOF traders reached this state of stand-off on Tuesday with the tightest range of the past seven days. You can take advantage of their efforts by placing a low risk BUY trigger at 23.28 and a SELL short trigger at 21.63. After one of the two orders is filled, cancel the un-triggered order and place a trailing stop at 1.65 which can be tightened to 0.83 on a 3.96 gain. XPOF closed Tuesday at 22.36. Earnings Report Date: N/A. Beta: N/A. Market-Cap: 1.091B. Optionable. HEALTHCARE SECTOR Cardiovascular Systems, Inc. (CSII: Healthcare/Medical Devices) - SQUEEZE PLAY. The struggle between buyers and sellers has resulted in CSII's narrowest trading range of the past seven sessions. With neither group able to take complete control on Tuesday, the stock's short term destiny is up for grabs. You can capitalize on this unusually tight condition by placing both a BUY order at 22.18 and a SELL order at 20.47. Regardless of which order is triggered, cancel the other one and follow your entry with a 1.71 trailing stop. Tighten the stop to 0.86 once you have a 1.96 gain. CSII closed Tuesday at 21.81. Earnings Report Date: May 04, 2022. Beta: 0.84. Market-Cap: 885.028M. Optionable. TECHNOLOGY SECTOR Intapp, Inc. (INTA: Technology/Software-Application) - SQUEEZE PLAY. INTA traders on both sides of the fence are now locked in a head-to-head shootout. Tuesday's price range was the narrowest in over a week, as neither Bears or Bulls have been able to clearly gain the upper hand. This gives us an opportunity to catch the next directional move with little risk of loss. To do this we'll place both a long and a short trigger with a BUY at 24.8 and a SELL short trigger at 23.06. When one of the orders is filled, cancel the remaining order and enter a 1.74 trailing stop. When you've reached a 3.12 paper profit, tighten the stop to 0.87. INTA closed at 24.25 on Tuesday. Earnings Report Date: N/A. Beta: N/A. Market-Cap: 1.489B. Not Optionable. UTILITIES SECTOR New Fortress Energy Inc. (NFE: Utilities/Utilities-Regulated Gas) - BULLISH BOUNCE. This trader-friendly setup turns repetitive stock behavior into real profits. Based on the tendency for up-trending stocks to drop briefly and then resume the up-trend, the Bullish Bounce places traders into excellent stocks when conditions are primed for more skyward movement. NFE's current price action near moving average support signals a potential BUY entry at 43.44, followed by a 3.8 trailing stop which can be tightened to 1.9 upon earning 3.3. NFE closed Tuesday at 41.96. Earnings Report Date: May 05, 2022. Beta: 1.56. Market-Cap: 8.68B. Optionable. IMPORTANT: Before entering any recommended positions, always use the RightLine "Risk Control System" to determine the level of acceptable risk and the maximum number of shares to buy. Link: https://prorightline.com/index.php/rightline-risk-control-system/ Use "Gap Adjusted Entries" to reset the Entry Price for stocks that gap beyond recommended entry levels. Link: https://prorightline.com/index.php/gap-adjusted-entries-increase-profits/ ***********************************
STOCK SPLIT SUMMARY
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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 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 ---------------- ------- -------- ------- ------ ------- ACM Research ACMR 3/4/2022 3/24/2022 3-for-1 Yes PAM Transport PTSI 3/9/2022 3/30/2022 2-for-1 Yes Amazon AMZN 3/9/2022 6/6/2022 20-for-1 Yes For a closer look at the different stages of a Stock Split go to: https://prorightline.com/index.php/trading-stock-splits-stages/ ======================================================================
Best of luck and have a Great Week!
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