April 27, 2023 - The RightLine Report
Notes From The Editor
Once in a while life seems to smack you in the face with a reminder that time really does fly. It might be a high school reunion, a birthday, or some other milestone. I had one of those moments not long ago when I caught up with an old roommate from college. Thinking back on those days, it seemed like just a few years had gone by. It's funny how the brain perceives different memories - some are distant and faint, some are always vivid and fresh.
These types of moments tend to put me in a contemplative mood and make me analyze life from a longer-term perspective. Living on a day-to-day basis, it's always good to occasionally kick back, smell the roses, and look at the bigger picture.
One of the turning points in my trading career was learning to "step outside" the day-to-day events and focus on my longer-term results. When you're trading on a daily basis, each session can be chalked up as a victory or defeat - depending on whether money was won or lost. But putting too much emphasis on what happens every day can overshadow the ultimate, more important goal: consistently making money.
Setting weekly, monthly, and yearly goals is a great way to focus on the long-term. Think of each day as a stepping-stone on the path to the weekly objective. This is especially important for daytraders who enter and exit several positions during every session; keeping the weekly goal in mind helps to keep emotions in check during winning or losing streaks.
For traders without several years of experience, it can be difficult to know whether a yearly objective is reasonable. Consider starting with monthly goals, which are easier to gauge. They also provide more immediate feedback, since you only have to go through four weeks of trading to see whether the goal was met or exceeded.
These targets represent a destination to work toward on the day-to-day journey. It's a satisfying feeling to meet or exceed a goal. A shortfall, on the other hand, can be very instructive - it's a signal to step back and analyze what's working and what isn't.
Personal experience shows habits that eat away at profitability - failing to use risk management, over-sizing positions, and so on - are among the biggest reasons for shortfalls. Once those habits are identified and corrected, you'll be on a much smoother road to consistent profits.
Here's to profits,
Kent Barton
Senior Analyst
Stocks Covered Today Stock Splits
Quick List
Stock 04/27 04/27 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
------ -------- -------- -------- -------- --------------- --------
MP 21.62 0.09 22.04 20.29 1.75/0.88 2.18
DKNG 20.95 0.54 21.43 1.78/0.89 1.44
RVMD 22.92 0.22 23.38 21.55 1.83/0.92 1.9
MLTX 21.05 0.26 21.87 19.67 2.2/1.1 3.64
AZEK 26.44 0.85 26.91 1.99/1 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
US stocks were higher on Thursday after a string of strong earnings announcements from the tech sector lifted investor sentiment. Following Wednesday's positive surprises from Microsoft (MSFT $305) and Google parent Alphabet (GOOG $108), FaceBook parent Meta Platforms (META $238) earnings also exceeded consensus estimates, rasing its share price by 14%. On the economic front, the US GDP report showed slower economic growth, implying that the Federal Reserve Bank is likely near the end of its interest rate tightening campaign. At the same time, continuing inflation means the Fed is not in a position to pivot to rate cuts anytime soon. Regardless, the market choose to view the latest news as a half-full glass, and that the end of tightening is now in sight. Oil, gold, Bitcoin and the yield on a 10-year bond all finished the session higher.
Apr 26, 2023 Apr 27, 2023
-------------------- --------------------
Dow 33,301.87 -228.96 33,826.16 524.29
Nasdaq 11,854.35 55.19 12,142.24 287.89
S&P 500 4,055.99 -15.64 4,135.35 79.36
NYSE Volume 3.84B 3.76B
NYSE Advancers 1,011 2,342
NYSE Decliners 1,969 636
Nasdaq Volume 5.3B 5.27B
Nasdaq Advancers 1,772 2,868
Nasdaq Decliners 2,674 1,530
New Highs/Lows
04/20 04/21 04/24 04/25 04/26 04/27
--------------------------------------------
NYSE New Highs 70 53 53 43 31 37
NYSE New Lows 34 39 40 103 101 55
Nasdaq New Highs 58 68 79 39 51 53
Nasdaq New Lows 149 201 211 385 408 219
Stocks Covered Today Stock Splits
TRADER'S TIP: "Eyes On the Prize"
Have you set goals for your trading? While all of us are playing to win, it's important to have specific targets to aim for. This begins at the most basic level by identifying potential profit targets for individual trades. As a general rule of thumb, setups should only be taken if the potential for reward is at least twice the amount being risked. For longer-term success, set weekly, monthly, and yearly targets for your overall account. This wider perspective makes it easier to measure progress and gauge the effectiveness of your trading strategy.
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 - 4135.35 April 27, 2023
52-Week High: 4325.28
52-Week Low: 3491.58
Daily Trend: DOWN
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 4250.19
Resistance 2: 4194.57
Resistance 1: 4164.04
Pivot: 4138.95
Support 1: 4108.42
Support 2: 4083.33
Support 3: 4027.71
NASDAQ Composite - 12142.24 April 27, 2023
52-Week High: 13181.09
52-Week Low: 10088.83
Daily Trend: DOWN
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 12618.79
Resistance 2: 12360.18
Resistance 1: 12216.32
Pivot: 12101.57
Support 1: 11957.71
Support 2: 11842.96
Support 3: 11584.34
Dow Industrials - 33826.16 April 27, 2023
52-Week High: 34712.28
52-Week Low: 28660.94
Daily Trend: DOWN
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 34516.86
Resistance 2: 34175.98
Resistance 1: 33992.47
Pivot: 33835.10
Support 1: 33651.59
Support 2: 33494.22
Support 3: 33153.34
Stocks Covered Today Stock Splits
Market Calendar
ECONOMIC REPORTS AND EVENTS (all times are Eastern): Wednesday, April 26, 2023: 26-Apr 8:30 am Durable-goods orders 26-Apr 8:30 am Durable-goods minus transportation 26-Apr 8:30 am Advanced U.S. trade balance in goods 26-Apr 8:30 am Advanced retail inventories 26-Apr 8:30 am Advanced wholesale inventories 26-Apr THURSDAY, APRIL 27 Thursday, April 27, 2023: 27-Apr 8:30 am GDP 27-Apr 8:30 am Initial jobless claims 27-Apr 8:30 am Continuing jobless claims 27-Apr 10:00 am Pending home sales 27-Apr FRIDAY, APRIL 28 Friday, April 28, 2023: 28-Apr 8:30 am Employment cost index 28-Apr 8:30 am Personal income (nominal) 28-Apr 8:30 am Personal spending (nominal) 28-Apr 8:30 am PCE index 28-Apr 8:30 am Core PCE index 28-Apr 8:30 am PCE (year-over-year) 28-Apr 8:30 am Core PCE (year-over-year) 28-Apr 9:45 am Chicago Business Barometer 28-Apr 10 am Consumer sentiment (final) 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: "Practice, Practice, Practice"
The purpose of rehearsal is to create the habit of the objective.
~ William H. Macy
Stocks Covered in This Issue
BASIC MATERIALS SECTOR
MP Materials Corp. (MP: Basic Materials/Other Industrial Metals & Mining) - SQUEEZE PLAY. MP 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. MP closed Thursday at 21.62. The plan is to enter in the right direction by placing a BUY trigger at 22.04 and a SELL short trigger at 20.29. Once MP establishes direction, place your triggered order. As soon as you are in the trade, place a trailing stop in the amount of 1.75. After you've collected a 2.18 profit, tighten the stop to 0.88. Earnings Report Date: May 04, 2023. Beta: 2.70. Market-Cap: 3.84B. Optionable.
CONSUMER CYCLICAL SECTOR
DraftKings Inc. (DKNG: Consumer Cyclical/Gambling) - BULLISH BOUNCE. DKNG has charted an upward weekly trend until recently when sellers showed up to push prices lower. On Thursday the selling ran into solid support. A potential bounce up from this level should attract buyers and likely return DKNG to the previously established uptrend. The Bullish Bounce set-up is the basis for our BUY entry, so be ready to go long on a rise to our trigger at 21.43. Set a trailing stop of 1.78, tightening to 0.89 on a 1.44 profit. DKNG closed at 20.95 on Thursday. Earnings Report Date: N/A. Beta: 1.79. Market-Cap: 9.673B. Optionable.
HEALTHCARE SECTOR
Revolution Medicines, Inc. (RVMD: Healthcare/Biotechnology) - SQUEEZE PLAY. RVMD traders on both sides of the fence are now locked in a head-to-head shootout. Thursday'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 23.38 and a SELL short trigger at 21.55. When one of the orders is filled, cancel the remaining order and enter a 1.83 trailing stop. When you've reached a 1.9 paper profit, tighten the stop to 0.92. RVMD closed at 22.92 on Thursday. Earnings Report Date: May 08, 2023. Beta: 1.45. Market-Cap: 2.434B. Optionable.
MoonLake Immunotherapeutics (MLTX: 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. MLTX 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 21.87 and a SELL short trigger at 19.67. When MLTX 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 2.2 trailing stop. After you've got a 3.64 profit, tighten the stop to 1.1. MLTX closed at 21.05 on Thursday. Earnings Report Date: N/A. Beta: 0.94. Market-Cap: 824.196M. Not Optionable.
INDUSTRIALS SECTOR
The AZEK Company Inc. (AZEK: Industrials/Building Products & Equipment) - 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. AZEK's current price action near moving average support signals a potential BUY entry at 26.91, followed by a 1.99 trailing stop which can be tightened to 1 upon earning 1.52. AZEK closed Thursday at 26.44. Earnings Report Date: May 04, 2023. Beta: 1.60. Market-Cap: 3.985B. 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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