April 14, 2022 - The RightLine Report
Notes From The Editor
Very few people who set out to get rich quick in the stock market actually do it. The small group of get-rich-quickers who do make lots of money fast typically do it by chance. They rarely keep their gains for very long.
This is because trying to get rich quick causes people to take on way too much risk. This is normally done by using excessive margin or by investing too much money in one position. Unfortunately, people who are in a hurry to make a lot of money tend not to do a good job of managing risk.
Managing risk involves focusing more on the potential downside of a trade or investment than the potential upside. In practical terms this means using an objective method to limit drawdowns in the value of your stock portfolio.
If you carefully manage risk you will almost certainly make money over the long-term. Those who consistently ignore risk and overload the wagons in an attempt to get rich quick are guaranteed failure.
For example, most traders with a get-rich-quick mindset don't realize that if they repeatedly bet everything on trades in which the probability of success is 90% they will eventually lose everything. Sure, they look like a genius for a while, but the one out of every ten trades that happens to be a 'loser' will wipe them out.
Trading is a type of speculation where education and skill can dramatically improve your odds of winning. Risk management is a skill. Reducing your risk increases the odds that you will win.
Stay focused on what you need to know and what you need to do. Remember that money is just a by-product of wise action.
Trade well,
Thomas Sutton, Editor
Note: The markets will be closed on Friday April 15th in honor of Good Friday. RightLine will also be closed on Friday, so the next Report will be published on Tuesday April 19th. From all of us at RightLine, we wish you a very Happy Easter!
Stocks Covered Today Stock Splits
Quick List
Stock 04/14 04/14 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
------ -------- -------- -------- -------- --------------- --------
TGLS 23.47 -0.29 24.46 22.64 1.82/0.91 2.48
AFL 65.33 0.36 66.44 3.83/1.92 2.14
ABBV 162.08 3.13 166.01 13.93/6.97 5.08
BCYC 24.01 -0.03 24.82 22.35 2.47/1.24 2.48
NSTG 22.11 0.23 22.57 20.19 2.38/1.19 4.72
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
US stocks were lower on Thursday as traders ended a Good Friday holiday shortened week sorting through a truckload of economic and earnings data. Unemployment claims were up, consumer sentiment unexpectedly increased, import prices were higher than predicted, March retail sales were mixed, and businesses continued to grow their inventories. In earnings news, Morgan Stanley (MS $85), Goldman Sachs (GS $320) and Citigroup (C $51) announced strong profit results, while Wells Fargo & Company (WFC $46) fell short on the revenue side. In other news, Twitter (TWTR $45) is hot in the spotlight after Elon Musk made a cash takeover offer of $54.20 per share for the social media platform. The USD/dollar and oil moved higher, gold and treasuries were lower, raising yields.
Apr 13, 2022 Apr 14, 2022
-------------------- --------------------
Dow 34,564.59 344.23 34,451.23 -113.36
Nasdaq 13,643.59 272.02 13,351.08 -292.51
S&P 500 4,446.59 49.14 4,392.59 -54.00
NYSE Volume 3.79B 4.08B
NYSE Advancers 2,450 1,222
NYSE Decliners 891 2,112
Nasdaq Volume 4.85B 4.62B
Nasdaq Advancers 3,550 1,560
Nasdaq Decliners 1,240 3,180
New Highs/Lows
04/07 04/08 04/11 04/12 04/13 04/14
--------------------------------------------
NYSE New Highs 68 117 66 90 110 142
NYSE New Lows 261 215 311 276 241 278
Nasdaq New Highs 77 81 70 72 87 96
Nasdaq New Lows 276 266 408 289 218 296
Stocks Covered Today Stock Splits
TRADER'S TIP: "Have You Heard . . .?"
"Nobody ever went broke taking a quick profit." A common saying, yet it isn't necessarily so. The most common theme among losing traders is the tendency to take a fast profit and hang onto losing positions. In fact, the combination is often lethal.
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".
S&P 500 - 4392.59 April 14, 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
NASDAQ Composite - 13351.08 April 14, 2022
52-Week High: 16212.23
52-Week Low: 12555.35
Daily Trend: DOWN
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 15668.50
Resistance 2: 14823.35
Resistance 1: 14267.17
Pivot: 13978.20
Support 1: 13422.02
Support 2: 13133.05
Support 3: 12287.90
Dow Industrials - 34451.23 April 14, 2022
52-Week High: 36952.65
52-Week Low: 32272.64
Daily Trend: DOWN
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 36517.28
Resistance 2: 35596.02
Resistance 1: 35158.57
Pivot: 34674.76
Support 1: 34237.31
Support 2: 33753.50
Support 3: 32832.24
Stocks Covered Today Stock Splits
Market Calendar
ECONOMIC REPORTS AND EVENTS (all times are Eastern): 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 Monday, April 18, 2022 10 am NAHB home builders' index April Tuesday, April 19, 2022 8:30 am Building permits (SAAR) March 8:30 am Housing starts (SAAR) March 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: "Switching Emotions"
Most of us are motivated by a variety of emotions that can be roughly grouped under two headings - hope and fear. For example, when the average investor is caught in a losing position, they usually do nothing other than hope that each day will be the last that the stock goes down. As a result, they end up losing more than if they had not "hoped" as much. On the other hand, when someone holds a winning position, they usually become fearful that the next session will take away their profits, so they get out the trade too soon. In effect, fear keeps them from making as much as they should.
Successful traders know how to reverse their emotions in these circumstances - to use fear when most people would hope, and use hope when most people would fear. It's much more profitable to fear that our losses will grow bigger, and hope that our profits will grow bigger. Research shows that this lesson can be difficult to accept, because it goes against human nature and is the complete opposite of what most people would do. However uncomfortable it may feel when you first attempt it, this simple reversal of emotions during normal trading situations is a valuable "brain tool" that will help you make wise decisions - sell losing positions and hold on to winners!
Stocks Covered in This Issue
BASIC MATERIALS SECTOR
Tecnoglass Inc. (TGLS: Basic Materials/Building Materials) - 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. TGLS 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 24.46 and a SELL short trigger at 22.64. When TGLS 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 1.82 trailing stop. After you've got a 2.48 profit, tighten the stop to 0.91. TGLS closed at 23.47 on Thursday. Earnings Report Date: May 05, 2022. Beta: 1.84. Market-Cap: 1.119B. Optionable.
FINANCIAL SERVICES SECTOR
Aflac Incorporated (AFL: Financial Services/Insurance-Life) - 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 65.33, AFL is on our radar for a BUY entry at 66.44. If you purchase shares of AFL, be sure to also place a trailing stop of 3.83. Snug it up to 1.92 on a 2.14 gain. Earnings Report Date: Apr 27, 2022. Beta: 0.93. Market-Cap: 42.436B. Optionable.
HEALTHCARE SECTOR
AbbVie Inc. (ABBV: Healthcare/Drug Manufacturers-General) - NEW HIGH DIP. ABBV's upward price momentum produced a brand new 52-week high just a few sessions ago. Shares have been sliding downhill since reaching that point, but the bounce that took place during Thursday's trading could be telling us the short-term decline is over. We need to confirm that sellers are exiting, so we'll wait for ABBV to move a bit higher before buying this stock. Set your BUY trigger at 166.01, and then enter a trailing stop of 13.93. Tighten the stop to 6.97 when you accumulate a 5.08-point gain. ABBV finished the Thursday session at 162.08. Earnings Report Date: Apr 28, 2022. Beta: 0.78. Market-Cap: 286.279B. Optionable.
Bicycle Therapeutics plc (BCYC: Healthcare/Biotechnology) - SQUEEZE PLAY. BCYC 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. BCYC closed Thursday at 24.01. The plan is to enter in the right direction by placing a BUY trigger at 24.82 and a SELL short trigger at 22.35. Once BCYC establishes direction, place your triggered order. As soon as you are in the trade, place a trailing stop in the amount of 2.47. After you've collected a 2.48 profit, tighten the stop to 1.24. Earnings Report Date: May 04, 2022. Beta: 0.00. Market-Cap: 710.662M. Optionable.
NanoString Technologies, Inc. (NSTG: Healthcare/Medical Instruments & Supplies) - SQUEEZE PLAY. The ticker for Thursday's session shows NSTG 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 22.57 and a SELL short trigger at 20.19. When NSTG 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 2.38 trailing stop. Upon reaching a 4.72 profit, resize the stop to 1.19. Earnings Report Date: N/A. Beta: 1.74. Market-Cap: 1.016B. 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
---------------- ------- -------- ------- ------ -------
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
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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