Notes From The Editor

To be objective within the context of trading simply means that you are unbiased and not unduly influenced by emotions or personal prejudices. The ability to think and trade objectively is one of the most important skills you can acquire in this business. With it you can view both the market and your individual trades without distortion caused by unrealistic expectations.

It may sound easy, yet it takes intention and determined persistence to reach a workable level of objectivity. The payoff comes when you see things as they truly are, not just as you want them to be.

Most traders tend to avoid or ignore any information that doesn't conform to their desired outcome of a trade. In other words, they prefer to limit the possibilities to whatever results they would like to see. While this approach can produce good feelings in the early stages of a trade, it inevitably creates more negative results than positive.

Being objective means you don't have to make a commitment to any specific outcome. This is a much better way to interpret information and determine probable results. As a trade progresses, it's much easier to interpret the flow of information when you are free of prejudice.

Trading objectively let's you quickly acknowledge the status of your trade and respond with planned actions. It increases confidence when you observe your trades as if you weren't in them. Instead of focusing on an outcome, you can focus on following your method.

Objectivity dramatically reduces trading stress. It also increases your field of vision and lets you take on new positions without the blind spots usually caused by emotionally charged expectations. This level of clarity enables you select trade setups with higher probabilities, and then execute them with a greater degree of success.

Trade well,

- Thomas Sutton, Editor

Quick List

    
Stock     04/07     04/07      Buy      Short   Trailing Stops     Gain 
Symbol    Price      +/-      Entry     Entry   Initial/Tighten   Amount 
------  --------  --------  --------  --------  ---------------  --------

SKX       24.26      0.56     26.18     23.35        2.83/1.42      4.34
CFX       20.53      0.41               19.63        3.26/1.63      4.96
NWPX      23.80     -0.97               22.93        3.70/1.85      5.66
OPINI     21.42      0.79     21.70     20.32        1.38/0.69      4.22

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 modestly lower on Tuesday as COVID-19 data gyrated between a flattening of the pandemic curve on Monday to an increase in deaths in the New York region 24-hours later. In equities, Exxon Mobil (XOM $41) announced a 30% decrease in capital spending, while Kraft Heinz (KHC $27) issued a positive pre-announcement for the first quarter. Economic news showed small business optimism in the US down by the most on record, and a decline in job openings. Oil prices, the USD/dollar and gold all finished the session lower, treasury yields were higher.

                        Apr 6, 2020            Apr 7, 2020    
                  --------------------   --------------------
Dow                    22,680   +1,627        22,654   -26.13
Nasdaq               7,913.24  +540.16      7,887.26   -25.98
S&P 500                 2,664  +175.03         2,659    -4.27

NYSE Volume                      6.51B                  7.16B
NYSE Advancers                    2733                   2175
NYSE Decliners                     276                    816

Nasdaq Volume                    3.86B                  4.12B
Nasdaq Advancers                  2811                   1832
Nasdaq Decliners                   501                   1415

                                 New Highs/Lows

                   03/31  04/01  04/02  04/03  04/06  04/07
                 --------------------------------------------
NYSE New Highs         5      3      2      2      6      7
NYSE New Lows         29    116    117    180     20     16
Nasdaq New Highs      18     14      4      5     12      9
Nasdaq New Lows       46     83    138    193     50     38
   

TRADER'S TIP: "Free Advice From TV Talking Heads"

When it comes to financial advice, always remember that the brokerage firms who pay the advisors make most of their money from commissions on stock sales. It may only be a few bucks for each transaction, but it adds up to hundreds of billions of dollars. Though many analysts are well intended, a major purpose of their stock picks is to attract customers and generate order flow. Whether the recommendations are profitable or not really isn't that important - the companies make money whenever someone buys or sells shares.

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 - 2659.41 April 7, 2020

52-Week High: 3393.52
52-Week Low: 2191.86
Daily Trend: UP
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 2913.64
Resistance 2: 2719.74
Resistance 1: 2604.19
Pivot: 2525.84
Support 1: 2410.29
Support 2: 2331.94
Support 3: 2138.04


NASDAQ Composite - 7887.26 April 7, 2020

52-Week High: 9838.37
52-Week Low: 6631.42
Daily Trend: UP
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 8698.23
Resistance 2: 8106.03
Resistance 1: 7739.55
Pivot: 7513.83
Support 1: 7147.35
Support 2: 6921.63
Support 3: 6329.43
        
Dow Industrials - 22653.86 April 7, 2020

52-Week High: 29568.57
52-Week Low: 18213.65
Daily Trend: UP
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 24913.33
Resistance 2: 23167.99
Resistance 1: 22110.26
Pivot: 21422.64
Support 1: 20364.91
Support 2: 19677.29
Support 3: 17931.94
 

Market Calendar

ECONOMIC REPORTS AND EVENTS (all times are Eastern):    

Monday, April 06, 2020:
06-Apr          None scheduled

Tuesday, April 07, 2020:
07-Apr  10 am   Job openings
07-Apr   3 pm   Consumer credit

Wednesday, April 08, 2020:
08-Apr   2 pm   FOMC minutes

Thursday, April 09, 2020:
09-Apr  8:30 am   Weekly jobless claims
09-Apr  8:30 am   Producer price index
09-Apr  10 am   Consumer sentiment index
09-Apr  10 am   Wholesale inventories

Friday, April 10, 2020:
10-Apr  8:30 am   Consumer price index
10-Apr  8:30 am   Core CPI



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

TRADER'S TIP: "Make Strength Your Ally"

Only a few traders have the financial strength to move individual low- volume stock prices in the direction they prefer, and no one is capable of consistently moving the entire market. Since this is the case, the best thing we can do is learn to identify and align our positions with the dominant side. Regardless of whether we trade 5-minute bars or weekly charts, whenever the balance shifts within our chosen time frame, we should always realign with the side of strength.

Stocks Covered in This Issue

CONSUMER CYCLICAL SECTOR

Skechers U.S.A., Inc. (SKX: Consumer Cyclical/Footwear & Accessories) - 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 SKX's case we will enter a BUY should it reach the 26.18 level, or a SELL short trade if it drops to 23.35. As usual a trailing stop is essential, 2.83 which should be tightened to 1.42 on a 4.34 gain. SKX closed Tuesday at 24.26. Earnings Report Date: Apr 15, 2020. Beta: 1.15. Market-Cap: 3.807B. Optionable.

INDUSTRIALS SECTOR

Colfax Corporation (CFX: Industrials/Specialty Industrial Machinery) - BEARISH U-TURN. A quick look at the charts for CFX show that despite the upward pressure caused by recent buying, the weekly downtrend is still in place. Tuesday's chart shows a potential return to that downtrend is in the works. This Bearish U-Turn set-up offers a potential entry point for a SHORT play. Set your trigger to SELL shares at 19.63, and follow your entry with a trailing stop of 3.26. Tighten the stop to 1.63 after reaching a 4.96 profit. CFX ended the latest session at 20.53. Earnings Report Date: May 05, 2020. Beta: 1.74. Market-Cap: 2.426B. Optionable.

Northwest Pipe Company (NWPX: Industrials/Metal Fabrication) - BEARISH U-TURN. This short setup turns common stock behavior into profits. Grounded in the tendency for down-trending stocks to bounce briefly and then return to the familiar down-trend, the Bearish U-Turn points traders to weak stocks when conditions are calling for more downward price action. NWPX's behavior on Tuesday near moving average support signals a potential SELL short entry at 22.93, followed by a 3.70 trailing stop which can be tightened to 1.85 upon earning 5.66. NWPX closed Tuesday at 23.80. Earnings Report Date: N/A. Beta: 0.98. Market-Cap: 232.07M. Optionable.

N/A SECTOR

Office Properties Income Trust (OPINI: N/A/N/A) - SQUEEZE PLAY. Trader indecision has put OPINI squarely in the center of a Bull versus Bear standoff. This tight spot should soon give way to a clear winner in the short-term, and we want to be in position for the move. To do that we've set a BUY entry at 21.70 and a SELL short entry at 20.32. Now it's up to OPINI to show us which entry will be filled. Once the trade is underway place a 1.38 trailing stop, which can be tightened to 0.69 after you achieve a 4.22 profit. OPINI closed on Tuesday at 21.42. Earnings Report Date: Apr 30, 2020. Beta: 1.40. Market-Cap: 1.079B. Not 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.

Disclaimer

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