Notes From The Editor

Our confidence as traders isn't based on our forecasting skills, it's found in our ability to respond appropriately to any and all market conditions. We focus on using adaptive trading methods that produce profits in whatever environment the market creates.

Our RightLine team developed their skills during years of varying real-time market conditions. We didn't just learn from the popular Bull market periods, but also from the extremely tough Bear markets that took many investors out of the game.

One thing we've learned ... no matter who you are, you have to go through some pain to get to the profits. Even Warren Buffet has dropped his plate a few times. That's why we emphasize Risk Control. At some point every trader feels the effect of the market's steep learning curve. We teach traders how to minimize and prevent any financial suffering.

We don't point fingers or throw someone under the bus just because they make a few mistakes. That's primarily because we're students of the market. Fortunately we've been students long enough to know how lucky we are to associate with traders who understand this, and promote education over ego.

We're certainly grateful for each of these role models and mentors. We're also just as grateful for our readers, who give us valuable feedback. The constructive comments, suggestions and even criticisms have helped make RightLine one of the most respected trading sites on the web.

Trade well,

Thomas Sutton, Editor

Quick List

    
Stock     08/11     08/11      Buy      Short   Trailing Stops     Gain 
Symbol    Price      +/-      Entry     Entry   Initial/Tighten   Amount 
------  --------  --------  --------  --------  ---------------  --------

JAKK      21.61     -0.09     22.41     20.66        1.75/0.88      2.44
DICE      20.57      0.18     21.53     19.34         2.19/1.1      2.88
DSGN      23.03     -0.27     24.23     22.27        1.96/0.98      2.32
PKOH      20.44      0.88     20.71     19.14        1.57/0.79       1.7
TPIC      23.93     -0.60     25.38     22.89        2.49/1.25      1.96

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 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.

Market Summary

Stocks finished the Thursday session in a mixed fashion following the release of lower than expected inflation data. The latest PPI (Producer Price Index) report has reduced market expectations that the Federal Reserve Bank will remain severely aggressive with tightening monetary policy. In other economic news, unemployment claims continued to rise, yet by less than predicted. On the equities front, Walt Disney Company (DIS $118) announced better quarterly earnings numbers and gained more subscribers than analysts anticipated. Oil prices were higher, treasuries and gold declined, and the USD/dollar was unchanged.

                        Aug 10, 2022           Aug 11, 2022   
                  --------------------   --------------------
Dow                 33,309.51   535.10     33,336.67    27.16
Nasdaq              12,854.80   360.88     12,779.91   -74.89
S&P 500              4,210.24    87.77      4,207.27    -2.97

NYSE Volume                       4.6B                  4.71B
NYSE Advancers                   2,752                  1,901
NYSE Decliners                     511                  1,295

Nasdaq Volume                    5.15B                  5.84B
Nasdaq Advancers                 3,550                  2,533
Nasdaq Decliners                 1,078                  2,076

                                 New Highs/Lows

                   08/04  08/05  08/08  08/09  08/10  08/11
                 --------------------------------------------
NYSE New Highs        29     27     38     26     61     57
NYSE New Lows         37     46     18     58     23     28
Nasdaq New Highs      68     68    103     47     69     84
Nasdaq New Lows       51     66     36     96     78     47
   

TRADER'S TIP: "Remember This . . ."

One brief but very important rule - never let a short-term loser turn into a long-term investment. It's usually a losing game.

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 - 4207.27 August 11, 2022

52-Week High: 4818.62
52-Week Low: 3636.85
Daily Trend: UP
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 4306.58
Resistance 2: 4218.73
Resistance 1: 4181.96
Pivot: 4130.88
Support 1: 4094.11
Support 2: 4043.03
Support 3: 3955.18

NASDAQ Composite - 12779.91 August 11, 2022

52-Week High: 16212.23
52-Week Low: 10565.14
Daily Trend: UP
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 13502.82
Resistance 2: 13027.11
Resistance 1: 12842.33
Pivot: 12551.40
Support 1: 12366.62
Support 2: 12075.69
Support 3: 11599.98
        
Dow Industrials - 33336.67 August 11, 2022

52-Week High: 36952.65
52-Week Low: 29653.27
Daily Trend: UP
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 33890.69
Resistance 2: 33305.78
Resistance 1: 33054.62
Pivot: 32720.87
Support 1: 32469.71
Support 2: 32135.96
Support 3: 31551.05
 

Market Calendar

ECONOMIC REPORTS AND EVENTS (all times are Eastern):    

Wednesday, August 10, 2022:
10-Aug  8:30 am   Consumer price index
10-Aug  8:30 am   Core CPI
10-Aug  8:30 am   CPI (year-over-year)
10-Aug  8:30 am   Core CPI (year-over-year)
10-Aug  10 am   Wholesale inventories (revision)
10-Aug   2 pm   Federal budget (compared with year earlier)

Thursday, August 11, 2022:
11-Aug  8:30 am   Initial jobless claims
11-Aug  8:30 am   Continuing jobless claims
11-Aug  8:30 am   Producer price index

Friday, August 12, 2022:
12-Aug  8:30 am   Import price index
12-Aug  10 am   UMich consumer sentiment index (preliminary)
12-Aug  10 am   UMich 5-year inflation expectations (preliminary)


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

TRADER'S TIP: "Whipping the Sea"

You have to analyze your behavior in the market instead of acting out your feelings. We get angry at the market, we become afraid of it, we develop silly superstitions. All the while, the market keeps cycling through its rallies and declines like an ocean going through its storms and calm periods. Mark Douglas writes in The Disciplined Trader that in the market, There is no beginning, middle, or end - only what you create in your own mind. Rarely do any of us grow up learning to operate in an arena that allows for complete freedom of creative expression, with no external structure to restrict it in any way."

We try to cajole or manipulate the market, acting like the ancient emperor Xerxes, who ordered his soldiers to horsewhip the sea for sinking his fleet. Most of us are not aware how manipulative we are, how we bargain, how we act out our feelings in the market. Most of us consider ourselves the center of the universe and expect every person or group to be either good or bad to us. This does not work in the market which is completely impersonal."

~ Dr. Alex Elder, trader and author of "Trading For A Living"

Stocks Covered in This Issue

CONSUMER CYCLICAL SECTOR

JAKKS Pacific, Inc. (JAKK: Consumer Cyclical/Leisure) - SQUEEZE PLAY. In certain stocks a tightly constricted price range is a sign that neither bulls nor bears are confident of winning in the near term. This often means that the side that gives up first causes a quick move in the opposite direction. In these fear dominated skirmishes, opposing traders always benefit from the retreat. In the Squeeze Play setup you can actually play both sides of the inevitable surge. JAKK traders reached this state of stand-off on Thursday with the tightest range of the past seven days. You can take advantage of their efforts by placing a low risk BUY trigger at 22.41 and a SELL short trigger at 20.66. After one of the two orders is filled, cancel the un-triggered order and place a trailing stop at 1.75 which can be tightened to 0.88 on a 2.44 gain. JAKK closed Thursday at 21.61. Earnings Report Date: Oct 25, 2022. Beta: 2.37. Market-Cap: 207.193M. Not Optionable.

HEALTHCARE SECTOR

DICE Therapeutics, Inc. (DICE: Healthcare/Biotechnology) - SQUEEZE PLAY. The struggle between buyers and sellers has resulted in DICE's narrowest trading range of the past seven sessions. With neither group able to take complete control on Thursday, the stock's short term destiny is up for grabs. You can capitalize on this unusually tight condition by placing both a BUY order at 21.53 and a SELL order at 19.34. Regardless of which order is triggered, cancel the other one and follow your entry with a 2.19 trailing stop. Tighten the stop to 1.1 once you have a 2.88 gain. DICE closed Thursday at 20.57. Earnings Report Date: N/A. Beta: N/A. Market-Cap: 786.377M. Optionable.

Design Therapeutics, Inc. (DSGN: Healthcare/Biotechnology) - SQUEEZE PLAY. DSGN 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 24.23 and a SELL short trigger at 22.27. When one of the orders is filled, cancel the remaining order and enter a 1.96 trailing stop. When you've reached a 2.32 paper profit, tighten the stop to 0.98. DSGN closed at 23.03 on Thursday. Earnings Report Date: Nov 07, 2022. Beta: N/A. Market-Cap: 1.285B. Optionable.

INDUSTRIALS SECTOR

Park-Ohio Holdings Corp. (PKOH: Industrials/Specialty Industrial Machinery) - SQUEEZE PLAY. Trader indecision has put PKOH 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 20.71 and a SELL short entry at 19.14. Now it's up to PKOH to show us which entry will be filled. Once the trade is underway place a 1.57 trailing stop, which can be tightened to 0.79 after you achieve a 1.7 profit. PKOH closed on Thursday at 20.44. Earnings Report Date: Nov 01, 2022. Beta: 1.18. Market-Cap: 262.006M. Optionable.

TPI Composites, Inc. (TPIC: Industrials/Specialty Industrial Machinery) - 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. TPIC 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 25.38 and a SELL short trigger at 22.89. When TPIC 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 2.49 trailing stop. After you've got a 1.96 profit, tighten the stop to 1.25. TPIC closed at 23.93 on Thursday. Earnings Report Date: Nov 07, 2022. Beta: 1.64. Market-Cap: 892.278M. 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  
---------------- -------     --------    -------     ------  -------   
Gamestop          GME        7/7/2022   7/22/2022    4-for-1   Yes
Alphabet          GOOG       2/1/2022   7/18/2022   20-for-1   Yes
Nasdaq Inc        NDAQ       7/20/2022  8/29/2022    3-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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