Notes From The Editor

The ability to think and trade objectively is one of the most important skills you can acquire as a trader. With it you can view both the market and your individual trades without distortion caused by unrealistic expectations.

To be an objective trader simply means that you are unbiased and not unduly influenced by emotions or personal prejudices. 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.

Being objective 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     08/16     08/16      Buy      Short   Trailing Stops     Gain 
Symbol    Price      +/-      Entry     Entry   Initial/Tighten   Amount 
------  --------  --------  --------  --------  ---------------  --------

TRQ       23.47      0.17     23.98                  1.67/0.84       1.6
GOOS      21.69     -0.17     22.15                  1.65/0.83      1.58
NOTV      25.60     -0.13     26.63     24.55        2.08/1.04      2.66
SWTX      30.15     -0.37     31.03      28.2        2.83/1.42      4.06
DV        27.35      0.02      27.9     26.02        1.88/0.94      1.98

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

US stocks were mixed on Tuesday following news that housing starts declined more than expected, while building permits, industrial production and capacity utilization increased more than predicted. In equities news, the share prices of Walmart (WMT $139) and Home Depot (HD $327) both rallied after the two companies topped quarterly earnings estimates. Oil prices, gold and the USD/dollar were lower, treasuries were mostly lower, lifting yields.

                        Aug 15, 2022           Aug 16, 2022   
                  --------------------   --------------------
Dow                 33,912.44   151.39     34,152.01   239.57
Nasdaq              13,128.05    80.87     13,102.55   -25.50
S&P 500              4,297.14    16.99      4,305.20     8.06

NYSE Volume                      3.77B                  4.38B
NYSE Advancers                   1,625                  1,723
NYSE Decliners                   1,583                  1,475

Nasdaq Volume                    4.48B                  5.03B
Nasdaq Advancers                 2,671                  2,077
Nasdaq Decliners                 1,932                  2,496

                                 New Highs/Lows

                   08/09  08/10  08/11  08/12  08/15  08/16
                 --------------------------------------------
NYSE New Highs        26     61     57     56     61     64
NYSE New Lows         58     23     28     24     19     21
Nasdaq New Highs      47     69     84     96     90     91
Nasdaq New Lows       96     78     47     61     52     61
   

TRADER'S TIP: "Earnings Conference Calls"

Since the SEC implemented the Fair Disclosure laws, most companies have begun allowing individual shareholders to listen in on earnings conference calls that were previously limited to analysts only. If you are tracking a stock as it approaches its scheduled earnings announcement, always look for the related conference call and mark it on your calendar.

The behavior of the stock during the call can telegraph early reaction to management's explanation of earnings related events. If you can't find any mention of the call, give the firm's Investor Relations department a ring and ask when or if a call will be held.

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 - 4305.20 August 16, 2022

52-Week High: 4818.62
52-Week Low: 3636.85
Daily Trend: UP
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 4560.99
Resistance 2: 4392.61
Resistance 1: 4336.38
Pivot: 4224.23
Support 1: 4168.00
Support 2: 4055.85
Support 3: 3887.47

NASDAQ Composite - 13102.55 August 16, 2022

52-Week High: 16212.23
52-Week Low: 10565.14
Daily Trend: UP
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 14061.07
Resistance 2: 13452.74
Resistance 1: 13249.96
Pivot: 12844.41
Support 1: 12641.63
Support 2: 12236.08
Support 3: 11627.75
        
Dow Industrials - 34152.01 August 16, 2022

52-Week High: 36952.65
52-Week Low: 29653.27
Daily Trend: UP
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 35539.12
Resistance 2: 34474.69
Resistance 1: 34117.87
Pivot: 33410.26
Support 1: 33053.44
Support 2: 32345.83
Support 3: 31281.40
 

Market Calendar

ECONOMIC REPORTS AND EVENTS (all times are Eastern):    

Wednesday, August 17, 2022:
17-Aug  8:30 am   Retail sales
17-Aug  8:30 am   Retail sales ex-motor vehicles
17-Aug  8:30 am   Real retail sales
17-Aug  10 am   Business inventories

Thursday, August 18, 2022:
18-Aug  8:30 am   Initial jobless claims
18-Aug  8:30 am   Continuing jobless claims
18-Aug  8:30 am   Philadelphia Fed manufacturing index
18-Aug  10 am   Existing home sales (SAAR)
18-Aug  10 am   Leading economic indicators

Friday, August 19, 2022:
19-Aug  10 am   Advance report on services


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

TRADER'S TIP: "Earnings Season - Playing the Pre-Earnings Run"

Every few months there are companies that pre-announce BETTER-than- expected upcoming earnings. Consequently their stock tends to ramp up as the announcement date approaches. Traders can take advantage of these pre-earnings runs by looking at earnings history and a company's record for beating Wall Street estimates.

Combine this with current sentiments on the specific sector as well as recent news on "sympathy stocks," and this type of information provides some insight as to where pre-earnings runs may develop. Just remember that very often a key part of playing the run is to exit prior to the actual announcement, locking in profits BEFORE the Street has a chance to react to the numbers. Oftentimes, shares turn sharply lower immediately following the announcement - regardless of the numbers - as traders rush to take profits.

Stocks Covered in This Issue

BASIC MATERIALS SECTOR

Turquoise Hill Resources Ltd. (TRQ: Basic Materials/Copper) - BULLISH BOUNCE. Positive price behavior near moving average support on Tuesday qualifies TRQ for a Bullish Bounce setup. After several sessions of declining prices, TRQ should soon begin trading in step with its established weekly uptrend. Tell your broker to BUY shares if TRQ moves up to our entry trigger set at 23.98. You can also enter a 1.67 trailing stop, to be replaced with a 0.84 trailing stop when you obtain a 1.6 profit. TRQ closed Tuesday at 23.47. Earnings Report Date: Oct 31, 2022. Beta: 1.70. Market-Cap: 4.727B. Optionable.

CONSUMER CYCLICAL SECTOR

Canada Goose Holdings Inc. (GOOS: Consumer Cyclical/Apparel Manufacturing) - BULLISH BOUNCE. Another bullish bouncer, GOOS appears ready to resume trading in an uptrend after recent selling forced the stock lower for several days. Tuesday's positive price action near Moving Average support says it's time to BUY shares if GOOS reaches our entry trigger set at 22.15. Also place a 1.65 trailing stop which can be narrowed to 0.83 when you reach a 1.58 profit. GOOS closed Tuesday at 21.69. Earnings Report Date: Nov 03, 2022. Beta: 1.42. Market-Cap: 2.306B. Optionable.

HEALTHCARE SECTOR

Inotiv, Inc. (NOTV: Healthcare/Diagnostics & Research) - SQUEEZE PLAY. NOTV is stuck in a Bull/Bear deadlock. Fortunately for traders this impasse should be resolved soon, with one side or the other taking control. We want to be positioned for a potential quick move up or down, so get ready to catch this train with a BUY entry at 26.63 and a SELL short entry at 24.55. Once your trade is filled, enter a 2.08 trailing stop. Tighten it to 1.04 after a 2.66 gain. NOTV closed on Tuesday at 25.60. Earnings Report Date: N/A. Beta: 2.77. Market-Cap: 653.204M. Optionable.

SpringWorks Therapeutics, Inc. (SWTX: Healthcare/Biotechnology) - SQUEEZE PLAY. Tuesday's narrow price range has created a potentially profitable setup in SWTX, as sellers and buyers find themselves in a near tie for control of price direction. The next short-term trend could go either way, so prepare for a move out of the draw within the next day or so. Set a BUY entry at 31.03 and a SELL short entry at 28.2. Let SWTX's price action determine your long or short entry. Once the order is filled, place a 2.83 trailing stop, and tighten it to 1.42 upon getting a 4.06 gain. SWTX closed Tuesday at 30.15. Earnings Report Date: Nov 02, 2022. Beta: 0.82. Market-Cap: 1.491B. Optionable.

TECHNOLOGY SECTOR

DoubleVerify Holdings, Inc. (DV: Technology/Software-Application) - SQUEEZE PLAY. Traders are feeling the pressure as DV's intra-day price range on Tuesday shrunk to the narrowest spread in over a week. The tension between buyers and sellers should provide enough pent-up engergy for a breakout move in the days ahead, so get ready to trade with the new trend. To achieve that, place a BUY entry at 27.9 and a SELL short entry at 26.02. DV's price movement will decide which entry is filled. As soon as you're in the trade, enter a 1.88 trailing stop. Tighten it to 0.94 after you get a 1.98 gain. DV closed Tuesday at 27.35. Earnings Report Date: Nov 07, 2022. Beta: N/A. Market-Cap: 4.486B. 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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