Notes From The Editor

Swing traders enjoy the luxury of not having to be overly concerned with the market's long-term direction. When holding a position for a few days or a few weeks, the near-term bias is what's important. That's why we implement a technical strategy that focuses on daily shifts on the major stock indexes. Weekly and monthly intervals come into play only when a historical level rears its head.

All this begs the question: why should swing traders even be concerned with the market's long-term bias? One reason is balance. In a strong uptrending market, traders who prefer to hold a variety of positions would probably want to have most of those skewed towards the bullish side. The inverse is true in a market that's been marching lower for several months or more.

A top-down approach to trading is another reason for monitoring the long-term bias. All rising markets tend to have leadership sectors where buying is particularly strong. Money will rotate in and out of these groups until the underlying uptrend fades, lifting individual stocks that can provide fertile ground for swing trades.

The long-term direction is also closely tied to economic indicators like GDP growth and inflation numbers. Swing traders should be aware of when major indicators are scheduled for release, as well as the expectations surrounding the data. More conservative types prefer to hold off on taking new positions when major indicators are on the horizon.

Swing traders have a lot of information to contend with on a daily basis. The underlying "big picture" doesn't have to be monitored too closely to make informed decisions; just remember keep an eye on these dynamics while focusing the lion's share of your attention on the near-term changes that dictate direction over a shorter timeframe.

Here's to profits!

Kent Barton
Senior Analyst

Quick List

    
Stock     04/21     04/21      Buy      Short   Trailing Stops     Gain 
Symbol    Price      +/-      Entry     Entry   Initial/Tighten   Amount 
------  --------  --------  --------  --------  ---------------  --------

WIFI      12.24      0.46     12.49                  1.53/0.77      2.02
VIRT      24.09      0.42     24.50                  1.96/0.98      3.68
ELMD      12.20      0.01     12.83                  1.90/0.95      2.58
HRI       20.33     -0.86     21.29     19.45        1.84/0.92      5.96

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

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Market Summary

Stocks closed lower on Tuesday as traders responded to the continuing crash in oil prices and a decline in existing home sales for March. Adding to the mix is market uncertainty regarding the timing of state and federal government reopening of the USA economy. Earnings season continued with announcements from Travelers Companies (TRV $102), Coca-Cola (KO $45) and IBM (IBM $117) all reporting the negative impact of COVID-19, while J.M. Smucker Company (SJM $117) raised its 2020 guidance due to increased demand across all US and Canadian retail channels. Gold declined, as did treasury yields, the USD/dollar added to its recent gains.

                        Apr 20, 2020           Apr 21, 2020   
                  --------------------   --------------------
Dow                    23,650  -592.05        23,019  -631.56
Nasdaq                  8,561   -89.41      8,263.23  -297.50
S&P 500                 2,823   -51.40         2,737   -86.60

NYSE Volume                      5.28B                  5.14B
NYSE Advancers                     670                    588
NYSE Decliners                    2294                   2365

Nasdaq Volume                    3.81B                  3.77B
Nasdaq Advancers                  1245                    773
Nasdaq Decliners                  2030                   2460

                                 New Highs/Lows

                   04/14  04/15  04/16  04/17  04/20  04/21
                 --------------------------------------------
NYSE New Highs        21     10     20     19     19      8
NYSE New Lows          6     22     32     10     14     31
Nasdaq New Highs      31     29     50     41     44     24
Nasdaq New Lows       19     29     70     13     27     41
   

TRADER'S TIP: "Chutes and Ladders"

All trends are not created equal. Up moves tend to take longer than down moves with similar ranges. In other words, even when the distance in price movement is the same, declines usually occur faster than rallies.

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 - 2736.56 April 21, 2020

52-Week High: 3393.52
52-Week Low: 2191.86
Daily Trend: DOWN
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 3141.08
Resistance 2: 2983.03
Resistance 1: 2928.79
Pivot: 2824.98
Support 1: 2770.74
Support 2: 2666.93
Support 3: 2508.88


NASDAQ Composite - 8263.23 April 21, 2020

52-Week High: 9838.37
52-Week Low: 6631.42
Daily Trend: UP
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 9720.82
Resistance 2: 9086.47
Resistance 1: 8868.30
Pivot: 8452.12
Support 1: 8233.95
Support 2: 7817.78
Support 3: 7183.43
        
Dow Industrials - 23018.88 April 21, 2020

52-Week High: 29568.57
52-Week Low: 18213.65
Daily Trend: DOWN
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 26205.07
Resistance 2: 25036.21
Resistance 1: 24639.35
Pivot: 23867.35
Support 1: 23470.49
Support 2: 22698.49
Support 3: 21529.63
 

Market Calendar

ECONOMIC REPORTS AND EVENTS (all times are Eastern):    

Monday, April 20, 2020:
20-Apr  8:30 am   Chicago Fed national activity index

Tuesday, April 21, 2020:
21-Apr  10 am   Existing home sales

Wednesday, April 22, 2020:
22-Apr          None scheduled

Thursday, April 23, 2020:
23-Apr  8:30 am   Weekly jobless claims
23-Apr  9:45 am   Markit manufacturing PMI (flash)
23-Apr  9:45 am   Markit services PMI (flash)
23-Apr  10 am   New home sales

Friday, April 24, 2020:
24-Apr  8:30 am   Durable goods orders
24-Apr  8:30 am   Core capital goods orders
24-Apr  10 am   Consumer sentiment index



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

TRADER'S TIP: "Setting Stops For Long Positions"

Here are a few suggestions on how to set stops for long (buy) positions.

1. Set the stop just under yesterday's low unless yesterday was a big up day. Then move the stop closer to today's open.

2. Set the stop just under a recent minor support level.

3. Use the Average True Range - ATR - to determine the expected movement for the stock in the time frame you trade, and set the stop to a reasonable distance beyond the range amount. (ATR is a feature found in RightLine Charts.)

4. Set the stop the instant your buy order gets filled.

5. Move stops up as the stock rises, first to break even, then to protect profits. On a long position when you use trailing stops, don't lower stops - only raise them.

6. As the stock moves up and tends to "top out" or market conditions become unfavorable, "tighten the stop." In other words, move your stop closer to the current market price. Doing this will effectively employ an "up or out" strategy" - either the price goes up, or you are out of the trade.

Stocks Covered in This Issue

COMMUNICATION SERVICES SECTOR

Boingo Wireless, Inc. (WIFI: Communication Services/Telecom Services) - BULLISH BOUNCE. Up-trending stocks like WIFI 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 Tuesday, WIFI is poised to lift off again. To take advantage of this setup, prepare to BUY shares at 12.49 if positive price action occurs. As always, follow your entry with a trailing stop. A 1.53 trailer should work well with WIFI. Tighten it to 0.77 on a 2.02 gainer. Earnings Report Date: May 05, 2020. Beta: 1.03. Market-Cap: 541.992M. Optionable.

FINANCIAL SERVICES SECTOR

Virtu Financial, Inc. (VIRT: Financial Services/Capital Markets) - BULLISH BOUNCE. If you are looking for another bouncer with profits in mind, VIRT 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 24.09, plan to buy shares at 24.50 and use a 1.96 trailing stop. Tighten the stop to 0.98 on a 3.68 gain. Earnings Report Date: May 07, 2020. Beta: -0.68. Market-Cap: 4.655B. Optionable.

HEALTHCARE SECTOR

Electromed, Inc. (ELMD: Healthcare/Medical Devices) - NEW HIGH DIP. ELMD is still showing the bullish strength that gave this stock a new 12-month high just a few days ago. Tuesday's intra-day price action near moving average support tells us that another run to the high-mark may be in the works. Get ready to BUY shares if ELMD reaches our trigger price of 12.83, and enter a 1.90 trailing stop. The stop can be resized to 0.95 once you have a 2.58 profit. ELMD closed Tuesday at 12.20. Earnings Report Date: N/A. Beta: 0.31. Market-Cap: 103.437M. Not Optionable.

INDUSTRIALS SECTOR

Herc Holdings Inc. (HRI: Industrials/Rental & Leasing Services) - SQUEEZE PLAY. One interesting trait of price volatility is that it cycles back and forth through periods of expansion and contraction. Stocks that have recently seen their daily price range shift from an average or wide range to an extremely contracted state are ideal candidates for expansive price moves. In many cases the next move is relatively fast and covers a sizable amount of territory. To take advantage of these trades we use both a BUY and a SELL entry. This allows us to enter in whichever direction the breakout takes. In HRI's case we will enter a BUY should it reach the 21.29 level, or a SELL short trade if it drops to 19.45. As usual a trailing stop is essential, 1.84 which should be tightened to 0.92 on a 5.96 gain. HRI closed Tuesday at 20.33. Earnings Report Date: Apr 23, 2020. Beta: 3.42. Market-Cap: 590.877M. 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.

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