August 15, 2024 - The RightLine Report
Notes From The Editor
Stock trading opportunities come in all flavors. Fortunately, the very best share at least one important characteristic - price movement. In any market it is essential to find stocks that are moving. Buyers prefer stocks that are trending higher, and short sellers favor stocks that are trending down. While the definition of a "moving" stock is somewhat subjective, there are several things to consider when looking for good stocks to trade.
The first place to look is at stocks that are making new highs and new lows. Stocks that have just set new highs make ideal buy-side candidates. The ability to rise to new heights reflects investor interest, and indicates the demand for shares is in excess of available supply.
On the flip side, stocks making new lows are exhibiting extreme weakness. This usually results in even more weakness as wave after wave of investors get tired of losing money and give up. The list of New Lows often contains stocks that are begging to be shorted.
As a rule, new-highs lead to more strength, while new-lows point to more trouble ahead. To get into trends early, look for stocks that have just made new four-week highs or lows. Also check the slope of the 22-day moving average. If it's leaning decidedly in one direction or the other, you can assume that the trend is relatively stable.
Keep in mind that although the purpose of trading is to be profitable, we don't have to catch 100% of every move. Find stocks that are active within your chosen time frame, and take a reasonable amount out of the anticipated movement. As for timing entries, start with the basic reversal strategies like the Bullish Bounce and Bearish U-Turn.
Trade well!
~ Thomas Sutton, Editor
Note: Click on the following links for more information about the Bullish Bounce and Bearish U-Turn trading strategies: https://prorightline.com/bullish-bounce/ and https://prorightline.com/bearish-u-turn/.
Stocks Covered Today Stock Splits
Quick List
Stock 08/15 08/15 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
------ -------- -------- -------- -------- --------------- --------
LTH 22.50 0.13 23.03 21.54 1.49/0.75 1.64
IART 21.86 0.56 22.35 20.93 1.42/0.71 2.88
PGNY 20.85 0.35 21.53 20.2 1.33/0.67 1.9
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
Major equity markets ended higher on Thursday, with large-cap stocks lagging behind small-cap stocks but outperforming mid-cap stocks. Sector performance was broad-based, with consumer discretionary, technology, and materials leading the gains, signaling a risk-on sentiment.
Bond yields increased, with the 10-year Treasury yield reaching approximately 3.92%. In global markets, Asian stocks rose, bolstered by Japan's GDP growth for the second quarter surpassing expectations. European markets also saw gains, supported by U.K. inflation for July coming in below forecasts. The USD/ dollar strengthened against major currencies, and both WTI oil and gold prices rose.
New data points to resilient consumer spending: Retail sales in July increased by 1% month-over-month, surpassing the anticipated 0.3% gain. Walmart, a key indicator of consumer health, reported robust second-quarter results that exceeded estimates and raised its outlook. These indicators suggest that while consumers are gradually scaling back spending, their resilience should support continued, albeit slower, economic growth.
Weekly jobless claims dropped for the second consecutive week to 227,000, compared to expectations of 233,000. This data suggests a labor market that is cooling but not collapsing, supporting the "soft landing" narrative for the economy and moderating inflation. A more relaxed labor market typically leads to slower wage growth, which can reduce services inflation. These trends reinforce the likelihood of the Federal Reserve cutting interest rates soon, potentially in September.
Aug 14, 2024 Aug 15, 2024
-------------------- --------------------
Dow 40,008.39 242.75 40,563.06 554.67
Nasdaq 17,192.60 4.99 17,594.50 401.89
S&P 500 5,455.21 20.78 5,543.22 88.01
NYSE Volume 3.39B 3.74B
NYSE Advancers 1,613 2,179
NYSE Decliners 1,171 639
Nasdaq Volume 5.01B 5.5B
Nasdaq Advancers 1,766 3,069
Nasdaq Decliners 2,391 1,159
New Highs/Lows
08/08 08/09 08/12 08/13 08/14 08/15
--------------------------------------------
NYSE New Highs 35 47 50 85 113 146
NYSE New Lows 48 54 73 35 36 15
Nasdaq New Highs 51 57 68 78 104 103
Nasdaq New Lows 195 155 190 143 155 105
Stocks Covered Today Stock Splits
TRADER'S TIP: "Unbiased Trading"
Unbiased trading is a powerful tool; it allows us to take advantage of price movement that may not make sense from a news or fundamental perspective. Think about it for a second. Instead of missing out on a rally just because we don't agree that it should be taking place, isn't it better set our prejudices aside and let the market tell us what IT wants to do?
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".
Stocks Covered Today Stock Splits
Market Calendar
ECONOMIC REPORTS AND EVENTS (all times are Eastern): MONDAY, AUG. 12 2:00 pm Monthly U.S. federal budget TUESDAY, AUG. 13 6:00 am NFIB optimism index 8:30 am Producer price index 8:30 am Core PPI 8:30 am PPI year over year 8:30 am Core PPI year over year WEDNESDAY, AUG. 14 8:30 am Consumer price index 8:30 am CPI year over year 8:30 am Core CPI July 8:30 am Core CPI year over year THURSDAY, AUG. 15 8:30 am Initial jobless claims 8:30 am Empire State manufacturing survey 8:30 am Philadelphia Fed manufacturing survey 8:30 am U.S. retail sales 8:30 am Retail sales minus autos 8:30 am Import price index 8:30 am Import price index minus fuel 9:15 am Industrial production 9:15 am Capacity utilization 10:00 am Business inventories FRIDAY, AUG. 16 10:00 am Consumer sentiment (prelim) 8:30 am Housing starts 8:30 am Building permits 10:00 am Home builder confidence index 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: "When's The Next Flight To Vegas?"
Many traders are just gamblers - they throw money at the market with no real plan or method. Sometimes they win big, and sometimes they lose big, but ultimately they lose it all. Technical analysis and risk control gives us an edge that can be used within a disciplined routine to avoid the gambler's trap. There's no need for gambling or impulsive trading when your decision-making process is based on specific rules.
Stocks Covered in This Issue
CONSUMER CYCLICAL SECTOR
Life Time Group Holdings, Inc. (LTH: Consumer Cyclical/Leisure) - SQUEEZE PLAY. The struggle between buyers and sellers has resulted in LTH'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 23.03 and a SELL order at 21.54. Regardless of which order is triggered, cancel the other one and follow your entry with a 1.49 trailing stop. Tighten the stop to 0.75 once you have a 1.64 gain. LTH closed Thursday at 22.50. Earnings Report Date: N/A. Beta: 1.86. Market-Cap: 4.621B. Optionable.
HEALTHCARE SECTOR
Integra LifeSciences Holdings Corporation (IART: Healthcare/Medical Devices) - 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 IART's case we will enter a BUY should it reach the 22.35 level, or a SELL short trade if it drops to 20.93. As usual a trailing stop is essential, 1.42 which should be tightened to 0.71 on a 2.88 gain. IART closed Thursday at 21.86. Earnings Report Date: Oct 23, 2024. Beta: 1.11. Market-Cap: 1.696B. Optionable.
Progyny, Inc. (PGNY: Healthcare/Health Information Services) - SQUEEZE PLAY. Trader indecision has put PGNY 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 21.53 and a SELL short entry at 20.2. Now it's up to PGNY to show us which entry will be filled. Once the trade is underway place a 1.33 trailing stop, which can be tightened to 0.67 after you achieve a 1.9 profit. PGNY closed on Thursday at 20.85. Earnings Report Date: Nov 5, 2024. Beta: 1.46. Market-Cap: 1.882B. 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.
Disclaimer
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