Notes From The Editor

In today's age of instant information, traders have access to an endless variety of data to help them make decisions. Stock charts, while still combining the same basic features they always have, offer more and more indicators every year. Then there's the matter of deciding which intervals to use. At times it can seem daunting!

When it comes to chart intervals for swing trading, we've found the daily chart to be highly effective. Anything smaller, such as the 30-minute or 15-minute, tends to reveal short-lived trends that are difficult to capitalize on for those who aren't daytraders.

Many short-term traders think that weekly charts are best left to long-term traders and investors. Swing traders, however, can also take advantage of the weekly interval. This is especially true during strong Bull markets, when hundreds of stocks are lifted to their highest point on the daily chart. When you run across one of these, you very well might be looking at an equity that's trading at all-time highs.

On the other hand, a stock might be trading at multi-year highs, but just a few points beneath strong historical resistance. These congestion or reversal zones don't show up on a daily chart, because they were created further back in time. The weekly chart reveals these levels in the past, giving you a clear sense for the potential risk/reward and allowing you to gauge upside targets.

When considering a long play in a stock that's trading at or near a 52-week peak, always pull back to the weekly chart to see how far it might run.

Whenever contemplating a trade set-up, it never hurts to take a quick glance at the weekly or monthly, even if a stock isn't breaking to long-term highs. During pullbacks you may notice that price action is approaching a key moving average. You'll often find that stocks stage strong reversals from these levels (typically the 50-week and 200-week MA's), especially when they converge with other bounce points such as horizontal support or a rising trendline.

As for the indicators, momentum oscillators like the MACD and stochastics can be predictive on weekly charts. However, swing traders should pay more attention to what these are doing on the daily interval. A weekly stochastic reversal, for example, might take a relatively long time to play itself out, whereas a daily stochastic reversal can start to produce results within a matter of days.

Here's to profits!

Kent Barton
Senior Analyst

Quick List

    
Stock     04/30     04/30      Buy      Short   Trailing Stops     Gain 
Symbol    Price      +/-      Entry     Entry   Initial/Tighten   Amount 
------  --------  --------  --------  --------  ---------------  --------

POL       23.29     -1.09     23.93     22.48        1.45/0.72      2.58
QTRX      26.20      1.20     26.86                  3.37/1.69      4.38
PD        21.11     -0.39     21.96                  2.00/1.00      2.64
LPSN      23.94     -0.70     24.46                  2.26/1.13      3.42

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 Thursday as another round of weak economic news dampened trader optimiism. Unemployment claims remain near record levels, personal income and spending declined, while Chicago manufacturing fell further into the contraction zone. In equities news, Facebook (FB $204) and Microsoft (MSFT $179) both topped earnings estimates, as McDonald's Corp (MCD $188) disappointed shareholders with results below expectations. Oil prices finished the session higher, treasury yields were mixed, the USD/dollar and gold finished lower.

                        Apr 29, 2020           Apr 30, 2020   
                  --------------------   --------------------
Dow                    24,634  +532.31        24,346  -288.14
Nasdaq               8,914.71  +306.98      8,889.55   -25.16
S&P 500                 2,940   +76.12         2,912   -27.08

NYSE Volume                      6.68B                  6.66B
NYSE Advancers                    2628                    794
NYSE Decliners                     365                   2161

Nasdaq Volume                    4.40B                  4.37B
Nasdaq Advancers                  2657                    854
Nasdaq Decliners                   614                   2398

                                 New Highs/Lows

                   04/23  04/24  04/27  04/28  04/29  04/30
                 --------------------------------------------
NYSE New Highs        21     14     31     31     24     17
NYSE New Lows         18     23      9      4      4      2
Nasdaq New Highs      38     39     67     54     41     28
Nasdaq New Lows       24     23     12      8      5      7
   

TRADER'S TIP: "What's It Worth?"

Garfield Drew, a prominent technician sixty years ago, said that "Stocks do not sell for what they are worth, but for what people THINK they are worth." It is generally recognized among technical analysts that prices in ALL markets at ALL times are based on trader psychology instead of company fundamentals.

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 - 2912.43 April 30, 2020

52-Week High: 3393.52
52-Week Low: 2191.86
Daily Trend: UP
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 3094.70
Resistance 2: 2952.82
Resistance 1: 2894.78
Pivot: 2810.94
Support 1: 2752.90
Support 2: 2669.06
Support 3: 2527.17


NASDAQ Composite - 8889.55 April 30, 2020

52-Week High: 9838.37
52-Week Low: 6631.42
Daily Trend: UP
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 9450.14
Resistance 2: 8980.92
Resistance 1: 8807.72
Pivot: 8511.70
Support 1: 8338.50
Support 2: 8042.48
Support 3: 7573.26
        
Dow Industrials - 24345.72 April 30, 2020

52-Week High: 29568.57
52-Week Low: 18213.65
Daily Trend: UP
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 25942.23
Resistance 2: 24775.42
Resistance 1: 24275.34
Pivot: 23608.61
Support 1: 23108.53
Support 2: 22441.80
Support 3: 21274.99
 

Market Calendar

ECONOMIC REPORTS AND EVENTS (all times are Eastern):    

Monday, April 27, 2020:
27-Apr          None scheduled

Tuesday, April 28, 2020:
28-Apr  8:30 am   Advance trade in goods
28-Apr  9:00 am   Case-Shiller home price index
28-Apr  10:00 am   Consumer confidence index
28-Apr  10:00 am   Homeownership rate

Wednesday, April 29, 2020:
29-Apr  8:30 am   Gross domestic product
29-Apr  10:00 am   Pending home sales index
29-Apr  2:00 pm   FOMC announcement
29-Apr  2:30 pm   Jerome Powell press conference

Thursday, April 30, 2020:
30-Apr  8:30 am   Initial jobless claims
30-Apr  8:30 am   Employment cost index
30-Apr  8:30 am   Personal income
30-Apr  8:30 am   Consumer spending
30-Apr  8:30 am   Core inflation
30-Apr  9:45 am   Chicago PMI

Friday, May 1, 2020:
01-May  9:45 am   Markit manufacturing PMI
01-May  10:00 am   ISM manufacturing index
01-May  10:00 am   Construction spending
01-May  Varies   Motor vehicle sales (annual rate)



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

TRADER'S TIP: "Entry Points"

Readers often ask, "How long is a Quick List stock entry point considered valid?" The short answer - it is valid for two weeks after we introduce it in the RightLine Report. Also, if the stock gaps through the entry level overnight, always use the Gap-Open tactic to set a new entry point. This new, gap-adjusted entry is valid for the same two-week period.

For more on Gap Adjusted Entries, click on the following link: http://www.rightline.net/education/gap-adjusted.html.

Stocks Covered in This Issue

BASIC MATERIALS SECTOR

PolyOne Corporation (POL: Basic Materials/Specialty Chemicals) - SQUEEZE PLAY. Thursday's trading action forced POL's daily price range into an abnormally narrow state. This translates into opportunity; for the cyclical nature of price volatility is to shrink extensively, then swell rapidly as shares move in one direction or another. Instead of trying to predict the direction POL will take when price volatility begins to increase, we'll set both a BUY (long) and a SELL (short) trigger to get us into the right trade. Be ready to BUY shares at 23.93 if POL moves higher, and place your order to SELL short at 22.48 if price declines to that level. As usual follow your entry with a trailing stop, 1.45 should be sufficient. Reduce your stop to 0.72 on a 2.58 gain. POL closed Thursday at 23.29. Earnings Report Date: Jul 23, 2020. Beta: 1.82. Market-Cap: 2.129B. Optionable.

HEALTHCARE SECTOR

Quanterix Corporation (QTRX: Healthcare/Medical Devices) - 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. QTRX's reaction to support on Thursday created a Bullish Bounce setup with a BUY entry trigger at 26.86. Use a 3.37 trailing stop, which should work well with QTRX's typical daily range. Tighten it to 1.69 on a 4.38 profit. QTRX closed at 26.20 on Thursday. Earnings Report Date: May 05, 2020. Beta: 1.42. Market-Cap: 739.513M. Not Optionable.

TECHNOLOGY SECTOR

PagerDuty, Inc. (PD: Technology/Software-Application) - 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. PD's current price action near moving average support signals a potential BUY entry at 21.96, followed by a 2.00 trailing stop which can be tightened to 1.00 upon earning 2.64. PD closed Thursday at 21.11. Earnings Report Date: Jun 18, 2020. Beta: N/A. Market-Cap: 1.643B. Optionable.

LivePerson, Inc. (LPSN: Technology/Software-Application) - 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 23.94, LPSN is on our radar for a BUY entry at 24.46. If you purchase shares of LPSN, be sure to also place a trailing stop of 2.26. Snug it up to 1.13 on a 3.42 gain. Earnings Report Date: May 05, 2020. Beta: 1.20. Market-Cap: 1.535B. 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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