April 7, 2022 - The RightLine Report
Notes From The Editor
Trading successfully often means going against our desire for a more bullish environment. When you think about it, trading is very much a cerebral activity. In order to do it effectively, we have to resist our animal instincts on a regular basis.
This is especially true on an emotional level. Since most investors' actions are emotional - yet unsuccessful - we have to take a different approach than the rest of the crowd.
Instead of raging against a market that doesn't do our bidding, we adapt to it. This involves more than just planning to use a method that brings some structure to our intentions. We also have to follow through and pull the trigger on each trade. But first we have to deal with the powerful emotional forces that can get in the way.
Trading requires us to overcome psychological barriers on a regular basis. Fear thrives in the market, so we have to remember that it's normal to sense it. Negative feelings can't be entirely eliminated from the trading environment, nor do they have to be. Remembering this lets us manage fear based emotions effectively.
Excessive hope - wishful thinking - can be a challenge too. It often causes traders to hold on to positions much longer than they should. On the other hand, a carefully prepared exit strategy can keep a trade open long enough to develop into a winner, even when fear and doubt are shouting "get out early!"
Confidence is an extremely powerful component of any winning strategy. Though it has a magical effect, it isn't magic. It is a natural byproduct of understanding the principles behind your trading methods, and routinely putting them into action. Traders who do understand and believe in what they are doing are unstoppable.
The temptation to quit can be overcome by choosing another frame of mind. Giving up insures failure, while persistence insures solution. Realizing that every action we take is rooted in attitude motivates us to select our points of view wisely.
When feeling hesitant to make choices, I always remember the old saying, "Good judgment comes from experience, and experience comes from bad judgment." With this in mind, let's all do our best to trade our best. And when we don't, we can still make the best of it.
Trade well!
~ Thomas Sutton, Editor
Stocks Covered Today Stock Splits
Quick List
Stock 04/07 04/07 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
------ -------- -------- -------- -------- --------------- --------
APA 41.00 0.18 42.46 4.29/2.15 3.84
AGL 24.79 0.16 25.45 2/1 3.3
PMVP 21.77 0.37 22.32 20.25 2.07/1.04 3.42
EDRY 32.64 -0.52 33.86 3.33/1.67 5.02
PAM 23.45 0.10 23.87 1.59/0.8 2.24
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 rallied on Thursday as traders dealt with heightened concerns after hawkish Fed commentary and minutes from the FOMC's (Federal Open Market Committee) March meeting this week suggested aggressive monetary tightening is underway. Economic headlines included the lowest number of unemployment claims since 1968 and a consumer credit report showing consumer borrowing in February expanded much more than expected. In equities, HP (HPQ $40) moved higher after it was announced that Warren Buffett's Berkshire Hathaway (BRK/B $347) has bought an 11% stake in the computer and printer maker, while Constellation Brands (STZ $243) was up as its beer unit sales and higher pricing increased company profits above estimates. Gold and the USD/dollar advanced higher, oil prices were roughly near even, treasuries were mixed.
Apr 6, 2022 Apr 7, 2022
-------------------- --------------------
Dow 34,496.51 -144.67 34,583.57 87.06
Nasdaq 13,888.82 -315.35 13,897.30 8.48
S&P 500 4,481.15 -43.97 4,500.21 19.06
NYSE Volume 5B 4.85B
NYSE Advancers 945 1,587
NYSE Decliners 2,391 1,720
Nasdaq Volume 5.34B 4.8B
Nasdaq Advancers 1,342 1,929
Nasdaq Decliners 3,465 2,794
New Highs/Lows
03/31 04/01 04/04 04/05 04/06 04/07
--------------------------------------------
NYSE New Highs 119 111 99 122 71 68
NYSE New Lows 73 76 47 116 271 261
Nasdaq New Highs 91 75 81 74 57 77
Nasdaq New Lows 125 130 80 156 308 276
Stocks Covered Today Stock Splits
TRADER'S TIP: "Your Trading Journal"
A Trading Journal has no physical specifications - it can be a notebook, pages you put in a binder, a spreadsheet or possibly copies of trade confirmations with notes written on them. Choose whatever is easiest for you to work with, since it's the details inside the journal that are important.
At a minimum, the content of your trading Journal should be broken into three major categories:
1) The Numbers (date, symbol, position size, cost, gain or loss, etc.)
2) The Decision-Making Process (Why did you chose to do what you did?)
3) What Can I Learn From the Trade?
This is where the rubber meets the road! Although a trade may end when you exit a position, this is often when the learning begins. A trading journal or diary will help answer the questions, "Now that I see the past with 20/20 vision, what would I have done differently? What did I do right? Did my emotional state of mind affect my success? Did I follow my trading plan? Did I use Risk Control? Did I set my stop at reasonable level?"
When you review your trades after the fact, it's amazing how easy it is to find important information that will help you with your next trades. We can't force stocks to do what we want them to, but we can obtain valuable insight from each trade we make. Moreover, the difference between progress and stagnation is our ability to learn from our experiences.
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 - 4500.21 April 7, 2022
52-Week High: 4818.62
52-Week Low: 4056.88
Daily Trend: DOWN
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 4823.03
Resistance 2: 4693.30
Resistance 1: 4619.58
Pivot: 4563.57
Support 1: 4489.85
Support 2: 4433.84
Support 3: 4304.11
NASDAQ Composite - 13897.30 April 7, 2022
52-Week High: 16212.23
52-Week Low: 12555.35
Daily Trend: DOWN
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 15427.70
Resistance 2: 14882.14
Resistance 1: 14571.82
Pivot: 14336.58
Support 1: 14026.26
Support 2: 13791.02
Support 3: 13245.46
Dow Industrials - 34583.57 April 7, 2022
52-Week High: 36952.65
52-Week Low: 32272.64
Daily Trend: DOWN
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 36577.61
Resistance 2: 35743.60
Resistance 1: 35280.93
Pivot: 34909.59
Support 1: 34446.92
Support 2: 34075.58
Support 3: 33241.57
Stocks Covered Today Stock Splits
Market Calendar
ECONOMIC REPORTS AND EVENTS (all times are Eastern): Monday, April 04, 2022: 04-Apr 10 am Factory orders 04-Apr 10 am Core capital equipment orders Tuesday, April 05, 2022: 05-Apr 8:30 am Foreign trade deficit 05-Apr 9:45 am 05-Apr 10 am ISM services index Wednesday, April 06, 2022: 06-Apr 2 pm FOMC minutes Thursday, April 07, 2022: 07-Apr 8:30 am Initial jobless claims 07-Apr 8:30 am Continuing jobless claims 07-Apr 3 pm Consumer credit Friday, April 08, 2022: 08-Apr 10 am Wholesale inventories 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: "Hot Zones"
While up and down price behavior reflects the impact of news and sentiment, heavy hitters like market makers and institutional traders use technical analysis to locate potential breakout and reversal zones. Some of these areas are easy to see, for they line up with previous high and low pivot points. Others are less obvious. Trend lines, Bollinger Bands, Fibonacci overlays, and other technical tools are used to locate the hot spots.
Where two or more of these converge, support or resistance is stronger. Bullish moves beyond these limits occur when sellers give in and join the buyers. Bearish moves occur in the same fashion, only in reverse. As traders we can anticipate these points, and manage positions by preparing for possible breakouts or reversals at these junctions.
It doesn't pay to be stubborn! If a trade tells us it wants to break through support or resistance, we can play it that way. If it decides to reverse, we can follow along. One measure of a trader's strength is the ability to quickly adapt and go with the current price flow. To a large degree, this is what is meant by the saying, "let the market tell you what to do."
Stocks Covered in This Issue
ENERGY SECTOR
APA Corporation (APA: Energy/Oil & Gas E&P) - NEW HIGH DIP. APA is still showing the bullish strength that gave this stock a new 12-month high just a few days ago. Thursday'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 APA reaches our trigger price of 42.46, and enter a 4.29 trailing stop. The stop can be resized to 2.15 once you have a 3.84 profit. APA closed Thursday at 41.00. Earnings Report Date: May 03, 2022. Beta: 4.43. Market-Cap: 14.224B. Optionable.
HEALTHCARE SECTOR
agilon health, inc. (AGL: Healthcare/Medical Care Facilities) - BULLISH BOUNCE. If you are looking for another bouncer with profits in mind, AGL 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 24.79, plan to buy shares at 25.45 and use a 2 trailing stop. Tighten the stop to 1 on a 3.3 gain. Earnings Report Date: May 24, 2022. Beta: N/A. Market-Cap: 9.945B. Optionable.
PMV Pharmaceuticals, Inc. (PMVP: Healthcare/Biotechnology) - SQUEEZE PLAY. A look at PMVP's daily chart shows what a price squeeze is all about. The constricted high-low daily trading range has produced a setup similar to a tightly coiled spring. Expect price to move sharply soon, with the direction yet to be determined. Let the upcoming market action resolve whether you will buy shares or sell short. To capture a move either way, place a BUY trigger at 22.32 and a SELL short trigger at 20.25. Once PMVP shows which way it's headed, place your triggered entry order. As soon as your order is filled, follow with a trailing stop of 2.07 and tighten to 1.04 on a 3.42 gain. PMVP closed Thursday at 21.77. Earnings Report Date: May 12, 2022. Beta: N/A. Market-Cap: 989.462M. Optionable.
INDUSTRIALS SECTOR
EuroDry Ltd. (EDRY: Industrials/Marine Shipping) - NEW HIGH DIP. As a rule of thumb, outstanding stocks like EDRY continue to perform well for extended periods of time. The recent pullback from a new 52-week high gives us a chance to enter a position without taking much risk. EDRY's price behavior on Thursday points to another move higher, so prepare to BUY shares at the trigger price of 33.86. Once in, follow the purchase with a 3.33 trailing stop. Change the stop to 1.67 upon gaining 5.02 points. EDRY closed Thursday at 32.64. Earnings Report Date: N/A. Beta: 0.22. Market-Cap: 95.282M. Not Optionable.
UTILITIES SECTOR
Pampa Energ S.A. (PAM: Utilities/Utilities-Independent Power Producers) - NEW HIGH DIP. "Buy the dip" is usually good advice when applied to an up-trending stock. This is expecially true when a new 52-week high has recently made its mark on the charts. PAM meets the setup requirements, so get ready to BUY if shares reach our trigger price of 23.87. Once you've confirmed that your order is filled, follow it with a 1.59 trailing stop which can be changed to 0.8 when you have a 2.24-point gain. PAM closed Thursday at 23.45. Earnings Report Date: N/A. Beta: 1.30. Market-Cap: 1.306B. 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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