Notes From The Editor

Apparently, communications experts analyzing face-to-face interactions have determined that only a small chunk of information - maybe 10% - is transmitted through what's actually said during a conversation. Another 10% is the underlying subtext and hidden meanings behind what's spoken. Making up the majority of communication is body language.

It's hard to say whether this statistic has much bearing in reality, because it's hard to quantify something like human interaction. But nonetheless, it highlights an interesting point: body language can reveal a person's thoughts or intentions, even when they aren't consciously trying to convey that information. Skilled readers of body language have an advantage in nearly any social situation - everything from dating to poker to business.

The stock market has its own "body language." Sure, you can turn on the TV and see exactly how the major indexes are doing. However, this only reveals a small amount of information. Dig deeper, and you'll find lots of important details lurking below the surface. For instance, let's say the S&P 500 is up 15 points. That's a nice move, but does the rally have any "conviction"? In other words, is the momentum likely to continue?

Daily volume readings help to answer that question. In general, a large rally that's accompanied by large volume has a high amount of "conviction." More investors/traders have committed to long positions, indicating that they expect the market to rise in the near-term.

On the other hand, a rally accompanied by light volume is less likely to be sustained. Oftentimes the market will move nicely without much participation.

Of course, terms like "weak volume" and "heavy volume" are relative; what's "normal" is dependent on the market's current climate. Frequent market observers are able to get a good sense for what "average" volume is for an index.

This provides a basic benchmark for comparing daily volume readings. Those volume statistics can be found in every issue of the Rightline Report, just under the "market summary" section.

Here's to profits,

Kent Barton
Senior Analyst

Quick List

    
Stock     04/13     04/13      Buy      Short   Trailing Stops     Gain 
Symbol    Price      +/-      Entry     Entry   Initial/Tighten   Amount 
------  --------  --------  --------  --------  ---------------  --------

HWKN      77.21      0.19     78.45                  4.84/2.42       4.9
BYON      26.39     -1.00      27.6     25.34        2.26/1.13       2.9
TNDM      33.50     -0.37     34.88                  3.26/1.63       3.4
PHR       23.58     -0.22     24.19     22.53        1.66/0.83      2.44
DAL       46.86     -0.77     47.56                  2.87/1.44      2.04

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.

Market Summary

Equity markets closed lower on Friday, marking their biggest decline since October, driven by a mix of elevated geopolitical risk, inflation worries, and earnings disappointments. The March inflation data released earlier in the week cast doubt on the expected Fed rate cuts, leading to a sharp rise in yields that pressured bonds. However, yields declined on concerns of a potential Iranian retaliatory strike, and investors also analyzed the first-quarter earnings reports from major US banks, which kicked off the earnings season.

JPMorgan's shares fell over 5% as the banks missed estimates for net interest income. Meanwhile, Citigroup's shares initially rose on its first-quarter profit exceeding estimates but later reversed their gains. In contrast, European stocks outperformed amid growing expectations that the European Central Bank (ECB) would begin cutting rates in June. The likelihood of diverging policies, with the ECB cutting rates before the Fed, contributed to the dollar rallying to a five-month high against other major currencies. Oil prices ended slightly higher amid heightened tensions in the Middle East.

Inflation concerns prompt a reevaluation of rate cuts - The hotter-than-expected Consumer Price Index (CPI) for the third consecutive month raised concerns about interest rates remaining higher for longer. With the economy still strong and progress on disinflation stalling, investors are recalibrating their expectations for Fed rate cuts.

Bond markets are currently pricing in between one and two rate cuts by the end of the year, a significant decrease from the six expected just three months ago. This adjustment pushed the 10-year Treasury yield to its highest level since November before retreating slightly over the last two days.

The bumpier-than-expected inflation trajectory is likely to introduce more volatility for both bonds and equities and could serve as a catalyst for the markets to pause after five months of robust gains. While we anticipate that the final stretch of inflation moderation may take longer and require patience, we remain optimistic about further progress. Factors supporting this outlook include potential moderation in shelter and used car prices, as well as a broader cooling in services inflation driven by slower wage growth.

                      Friday                 On The Week      
                  --------------------   --------------------
Dow                 37,920.40  -538.68     -1007.19    -2.59%
Nasdaq              16,175.09  -267.10       -73.43    -0.45%
S&P 500              5,113.28   -85.78          -93    -1.79%

NYSE Volume                      3.97B                       
NYSE Advancers                     449                       
NYSE Decliners                   2,388                       

Nasdaq Volume                    4.56B                       
Nasdaq Advancers                 1,009                       
Nasdaq Decliners                 3,246                       

                                 New Highs/Lows

                   04/05  04/08  04/09  04/10  04/11  04/12
                 --------------------------------------------
NYSE New Highs       102    131    105     35     47     63
NYSE New Lows         31     16      8     46     28     60
Nasdaq New Highs      78    112     98     36     61     49
Nasdaq New Lows      143     89     80    187    141    209
   

TRADER'S TIP: "The Importance of Convergence"

When charting a stock or index, always be on the lookout for technical convergence. Consider it very important anytime two or more trend lines, moving averages, pivotal highs or lows, and other support or resistance levels show up in the same price zone.

Convergence multiplies the supportive or resistive strength of the combined elements, and increases the likelihood of a price reversal at that junction. Whenever a convergence zone isn't able to deflect price, the breakthrough indicates the trend in place is gaining momentum.

Use this insight to your advantage - from the moment you begin evaluating the strength of a potential setup, all the way to the point you exit the trade. Each new convergence along the way provides you with extremely valuable information!

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".

Market Calendar

ECONOMIC REPORTS AND EVENTS (all times are Eastern):    

MONDAY, APRIL 15					
2:30 am	Dallas Fed President Lorie Logan speaks in Tokyo				
8:30 am	Empire State manufacturing survey	
8:30 am	U.S. retail sales	
8:30 am	Retail sales minus autos	
8:30 am	New York Fed President John Williams TV appearance				
10:00 am	Business inventories	
10:00 am	Home builder confidence index	
8:00 pm	San Francisco Fed President Mary Daly speaks
				
TUESDAY, APRIL 16					
8:30 am	Housing starts	
8:30 am	Building permits	
9:00 am	Fed Vice Chair Philip Jefferson speaks				
9:15 am	Industrial production	
9:15 am	Capacity utilization	
1:15 pm	Fed Chair Jerome Powell speaks
				
WEDNESDAY, APRIL 17					
2:00 pm	Fed Beige Book				
5:30 pm	Cleveland Fed President Loretta Mester speaks				
7:15 pm	Fed Governor Michelle Bowman speaks
				
THURSDAY, APRIL 18					
8:30 am	Initial jobless claims
8:30 am	Philadelphia Fed manufacturing survey	
9:05 am	Fed Governor Michelle Bowman speaks				
9:15 am	New York Fed President John Williams speaks				
10:00 am	Existing home sales	
10:00 am	U.S. leading economic indicators	
11:00 am	Atlanta Fed President Raphael Bostic speaks				
5:45 pm	Atlanta Fed President Raphael Bostic speaks
				
FRIDAY, APRIL 19					
10:30 am	Chicago Fed President Austan Goolsbee speaks

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

TRADER'S TIP: "Trendlines & Volume"

When expanding volume accompanies price action in the direction of a trendline, it confirms the trend. The same is true when volume dries up as prices retreat back to the trendline. However, if volume increases as prices pull back to a trendline, or if volume drops when prices pull away from a trendline, consider it a warning that the trendline may be in trouble.

Stocks Covered in This Issue

BASIC MATERIALS SECTOR

Hawkins, Inc. (HWKN: Basic Materials/Specialty Chemicals) - BULLISH BOUNCE. Everyone familiar with price charts knows that a stock tends to bounce its way higher rather than move in a straight line. The lower levels of these short-term rebounds offer a safe and often early entry into stocks that are in the process of establishing longer-term uptrends. HWKN's reaction to support on Friday created a Bullish Bounce setup with a BUY entry trigger at 78.45. Use a 4.84 trailing stop, which should work well with HWKN's typical daily range. Tighten it to 2.42 on a 4.9 profit. HWKN closed at 77.21 on Friday. Earnings Report Date: May 15, 2024. Beta: 0.76. Market-Cap: 1.617B. Optionable.

CONSUMER CYCLICAL SECTOR

Beyond, Inc. (BYON: Consumer Cyclical/Internet Retail) - SQUEEZE PLAY. Friday's trading session left BYON in a very narrow price range after buyers and sellers fought to a near stalemate. Both sides are looking for some traction, and a breakout either way could provide a nice gain in the short term. To get aboard, set your BUY trigger at 27.6 and your SELL short trigger at 25.34. One of the orders will be triggered by upcoming price action. When your market order is filled, cancel the remaining trigger and enter a 2.26 trailing stop. Once you have a 2.9 profit, reduce the stop to 1.13. Earnings Report Date: Apr 25, 2024. Beta: 3.83. Market-Cap: 1.207B. Optionable.

HEALTHCARE SECTOR

Tandem Diabetes Care, Inc. (TNDM: Healthcare/Medical Devices) - 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. TNDM's current price action near moving average support signals a potential BUY entry at 34.88, followed by a 3.26 trailing stop which can be tightened to 1.63 upon earning 3.4. TNDM closed Friday at 33.50. Earnings Report Date: May 02, 2024. Beta: 1.13. Market-Cap: 2.163B. Optionable.

Phreesia, Inc. (PHR: Healthcare/Health Information Services) - SQUEEZE PLAY. The ticker for Friday's session shows PHR is now stuck in a tight price band. With the cyclical contraction and expansion nature of volatility in force, we should see a new period of price expansion in the days ahead. To improve the odds of catching the next directional wave, place a BUY trigger at 24.19 and a SELL short trigger at 22.53. When PHR starts moving out of its narrow range, your order will be triggered. Once you're in the trade, cancel the opposing trigger and set a 1.66 trailing stop. Upon reaching a 2.44 profit, resize the stop to 0.83. Earnings Report Date: May 29, 2024. Beta: 0.92. Market-Cap: 1.33B. Optionable.

INDUSTRIALS SECTOR

Delta Air Lines, Inc. (DAL: Industrials/Airlines) - BULLISH BOUNCE. Among other strengths, the Bullish Bounce protects traders from buying a stock "at the top" of its current cycle. The entry into this setup always takes place in upward-moving stocks that have retreated a bit under normal conditions. Now sitting at 46.86, DAL is on our radar for a BUY entry at 47.56. If you purchase shares of DAL, be sure to also place a trailing stop of 2.87. Snug it up to 1.44 on a 2.04 gain. Earnings Report Date: Jul 11, 2024. Beta: 1.43. Market-Cap: 30.239B. 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  
---------------- -------     --------    -------     ------  -------   

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.

Trader's Corner

"Index and Sector Stocks"

Want to trade the entire Nasdaq, Dow, or S&P 500 in one stock? Index stocks and sector stocks (formally known as ETFs, or Exchange Traded Funds) provide a convenient way to invest in ALL of the leading companies in a top index or industry. Similar to mutual funds, sector and index stocks provide access to a "basket" of stocks in an entire index or industry sector through a single transaction.

Sector and index stocks trade just like any other stock and can be used for short-term or longer-term strategies. Short-term traders love them because they are very liquid, can easily be traded both long or short on margin, and tend to move closely with their related indices. For long-term investors, these stocks provide unique tax advantages, and unlike mutual funds there are no management fees.

Just as "normal" stocks represent ownership in a publicly traded company, sector and index stocks signify ownership in a Unit Investment Trust, or UIT - a collection of securities (stocks for our purposes) bundled together in a trust. Due to the number of stocks in each group, sector and index stocks provide an element of safety through diversification, and are usually less volatile than the individual stocks they represent. They generally provide a lower-stress way to trade highly volatile markets.

Sector stocks are represented by individual stock symbols - here are several examples:

SPY - Formally named Standard & Poor's Depositary Receipts, SPDRs are commonly called "Spiders" and represent the basket of stocks in the S&P 500 (SPX). This was the first index stock and was created by the American Stock Exchange in January 1993.

DIA - The Dow Industrial Average Model of New Depository Shares (DIAMONDS) represent the basket of 30 stocks in the DOW (DJX or INDU).

QQQQ - Represents the stocks in the Nasdaq 100 (NDX).

HOLDRS - HOLding Company Depositary ReceiptS represent the common stock of companies from a specific industry segment. Merrill Lynch launched HOLDRS for trading on the Amex stock exchange, which is now the NYSE MKT LLC Equities exchange. For more information on Merrill Lynch's current HOLDRS and the stocks represented by each one, go to the following webpage:
https://www.holdrs.com/holdrs/main/index.asp?Action=Outstanding

FFX - Fortune 500 index represents the companies in the Fortune 500.

FEX - Fortune e-50 index represents the top 50 Internet economy companies.

IShares Sector Funds provide investment vehicles similar to HOLDRS and are modeled after specific index funds based on the Russell 2000, Morgan Stanley Capital International (MSCI) Index Fund Series, S&P 500, and the DOW indices. Ishares are the world's most extensive family of Exchange Traded Funds (ETFs).

You can trade index and sector stocks exactly the same way you trade regular stocks through any brokerage. HOLDRS require a minimum purchase of 100 shares, but you can buy a single share of the other sector stocks. The lower volatility of sector stocks makes them relatively easy on the nerves to trade, but as with any trade, risk management is critical and stops must be used to protect against the market moving against a position.

Good luck!

Note: For more on Index and Sector Funds (ETFs) go to the following webpage: https://prorightline.com/education/etfs.html

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.

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.

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