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August 2, 2022 - The RightLine Report
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NOTES FROM THE EDITOR
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To be a successful trader you have to consistently see the market as it is instead of how you might prefer it to be. This allows you to take appropriate actions, which in turn produce consistent profits. From this standpoint it's easy to see that trading results are directly linked to your ability to view the market correctly.
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"QUICK LIST"
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Stock 08/02 08/02 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
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BIG 20.50 -0.46 21.26 19.79 1.47/0.74 2.04
CEIX 59.63 -0.58 61.8 5.92/2.96 8.32
GLNG 22.49 0.13 22.94 21.57 1.37/0.69 2.22
ACLX 21.99 -0.05 22.57 20.93 1.64/0.82 3.22
EBIX 22.48 -0.26 23.12 21.62 1.5/0.75 1.88
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" at https://prorightline.com/index.php/rightline-report-quick-list/. In addition,always use the RightLine Risk Calculator before entering any position. For access to the Risk Calculator, go to https://prorightline.com/index.php/risk-calculator/. To learn more about controlling risk go to the RightLine Risk Control System at https://prorightline.com/index.php/rightline-risk-control-system/ For a glossary of terms unique to The RightLine Report go to: https://prorightline.com/index.php/glossary/ Questions? Send us an email using our contact form at: https://prorightline.com/index.php/contact-us/
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MARKET SUMMARY
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Stocks were modestly lower on Tuesday following the release of data showing that job openings declined for the third month in a row and the rate of hiring dipped slightly. In equities, Caterpillar (CAT $184) beat earnings expectations yet the share price fell, in part due to unfavorable currency movements and supply chain issues. On the other hand, Uber (UBER $29) rallied despite reporting a large quarterly loss as revenues were up a massive 105% from the previous year. The USD/dollar and oil prices advanced higher, while treasuries and gold declined. Aug 1, 2022 Aug 2, 2022
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Dow 32,798.40 -46.73 32,396.17 -402.23
Nasdaq 12,368.98 -21.71 12,348.76 -20.22
S&P 500 4,118.63 -11.66 4,091.19 -27.44
NYSE Volume 4.27B 4.79B
NYSE Advancers 1,767 1,450
NYSE Decliners 1,511 1,754
Nasdaq Volume 4.41B 4.78B
Nasdaq Advancers 2,252 2,341
Nasdaq Decliners 2,398 2,231
New Highs/Lows
07/26 07/27 07/28 07/29 08/01 08/02
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NYSE New Highs 21 33 44 42 41 35
NYSE New Lows 70 45 50 46 48 32
Nasdaq New Highs 52 58 84 91 80 52
Nasdaq New Lows 172 144 131 121 118 95
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TRADER'S TIP:
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TRADER'S TIP: "Money Management: When Bigger Isn't Better" Money management should pay more attention to potential trading loss than to potential gain, and include a method to limit draw-downs in your account. Unless some type of effective Position Sizing is used, you are almost guaranteed to lose money over the long-term. For instance, most traders don't know that if you repeatedly put all of your cash into a trade in which the odds of winning are nine out of ten, you will eventually lose it all. Although you may make money at first, in time the one loser out of every ten winners will empty your account. **************************
THE TECHNICAL ANALYST
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This section contains important technical data for the three major market averages -- the S&P 500, the Nasdaq Comp Index, and the Dow Industrial Average. For guidance on how to use this information, go to: https://prorightline.com/index.php/technical-analyst-section-rightline-report/ S&P 500 - 4091.19 August 2, 2022 52-Week High: 4818.62 52-Week Low: 3636.85 Daily Trend: UP Weekly trend: UP Weekly Pivot Levels Resistance 3: 4519.21 Resistance 2: 4289.80 Resistance 1: 4210.04 Pivot: 4060.39 Support 1: 3980.63 Support 2: 3830.98 Support 3: 3601.57 https://www.prorightline.com/rlch/080222SPX.jpg--ECONOMIC REPORTS AND EVENTS (all times are Eastern): Wednesday, August 03, 2022: 03-Aug 9:45 am 03-Aug 10 am ISM services index 03-Aug 10 am Factory orders 03-Aug 10 am Core capital equipment orders (revision) 03-Aug 10 am Rental vacancy rate 03-Aug 10 am Homeowner vacancy rate Thursday, August 04, 2022: 04-Aug 8:30 am Initial jobless claims 04-Aug 8:30 am Continuing jobless claims 04-Aug 8:30 am Trade deficit Friday, August 05, 2022: 05-Aug 8:30 am Nonfarm payrolls 05-Aug 8:30 am Unemployment rate 05-Aug 8:30 am Average hourly earnings 05-Aug 8:30 am Labor-force participation rate, ages 25-54 For a chart of typical Up or Down market reactions to specific major US economic reports, go to "Economic Indicator Effects" at this link: https://prorightline.com/index.php/economic-indicator-effects/
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TRADER'S TIP:
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TRADER'S TIP: "The Four Stages of Market Action" A study of price charts reveals that all markets have the same basic movements. First is the accumulation or consolidation stage, which occurs at the bottom of a market; this is often referred to as a "base building" period. The second stage is the rally or run-up stage that occurs when stocks trend higher. The third stage is the distribution stage, another form of consolidation that signals the top of a market. The fourth stage is the sell off, or declining stage. Most markets spend over 80% of the time in the consolidation stages, when it is usually best to trade for short-term profits. ***********************************
STOCKS COVERED IN THIS ISSUE
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CONSUMER DEFENSIVE SECTOR Big Lots, Inc. (BIG: Consumer Defensive/Discount Stores) - SQUEEZE PLAY. Trader indecision has put BIG 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 21.26 and a SELL short entry at 19.79. Now it's up to BIG to show us which entry will be filled. Once the trade is underway place a 1.47 trailing stop, which can be tightened to 0.74 after you achieve a 2.04 profit. BIG closed on Tuesday at 20.50. Earnings Report Date: Aug 25, 2022. Beta: 2.11. Market-Cap: 592.809M. Optionable. ENERGY SECTOR CONSOL Energy Inc. (CEIX: Energy/Thermal Coal) - NEW HIGH DIP. CEIX's upward price momentum produced a brand new 52-week high just a few sessions ago. Shares have been sliding downhill since reaching that point, but the bounce that took place during Tuesday's trading could be telling us the short-term decline is over. We need to confirm that sellers are exiting, so we'll wait for CEIX to move a bit higher before buying this stock. Set your BUY trigger at 61.8, and then enter a trailing stop of 5.92. Tighten the stop to 2.96 when you accumulate a 8.32-point gain. CEIX finished the Tuesday session at 59.63. Earnings Report Date: Aug 04, 2022. Beta: 1.97. Market-Cap: 2.076B. Optionable. Golar LNG Limited (GLNG: Energy/Oil & Gas Midstream) - SQUEEZE PLAY. GLNG traders on both sides of the fence are now locked in a head-to-head shootout. Tuesday'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 22.94 and a SELL short trigger at 21.57. When one of the orders is filled, cancel the remaining order and enter a 1.37 trailing stop. When you've reached a 2.22 paper profit, tighten the stop to 0.69. GLNG closed at 22.49 on Tuesday. Earnings Report Date: Aug 11, 2022. Beta: 0.75. Market-Cap: 2.429B. Optionable. HEALTHCARE SECTOR Arcellx, Inc. (ACLX: Healthcare/Biotechnology) - SQUEEZE PLAY. The struggle between buyers and sellers has resulted in ACLX's narrowest trading range of the past seven sessions. With neither group able to take complete control on Tuesday, 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 22.57 and a SELL order at 20.93. Regardless of which order is triggered, cancel the other one and follow your entry with a 1.64 trailing stop. Tighten the stop to 0.82 once you have a 3.22 gain. ACLX closed Tuesday at 21.99. Earnings Report Date: N/A. Beta: N/A. Market-Cap: 962.867M. Optionable. TECHNOLOGY SECTOR Ebix, Inc. (EBIX: Technology/Software-Application) - 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. EBIX traders reached this state of stand-off on Tuesday with the tightest range of the past seven days. You can take advantage of their efforts by placing a low risk BUY trigger at 23.12 and a SELL short trigger at 21.62. After one of the two orders is filled, cancel the un-triggered order and place a trailing stop at 1.5 which can be tightened to 0.75 on a 1.88 gain. EBIX closed Tuesday at 22.48. Earnings Report Date: Aug 08, 2022. Beta: 2.60. Market-Cap: 694.74M. Optionable. IMPORTANT: Before entering any recommended positions, always use the RightLine "Risk Control System" to determine the level of acceptable risk and the maximum number of shares to buy. Link: https://prorightline.com/index.php/rightline-risk-control-system/ Use "Gap Adjusted Entries" to reset the Entry Price for stocks that gap beyond recommended entry levels. Link: https://prorightline.com/index.php/gap-adjusted-entries-increase-profits/ ***********************************
STOCK SPLIT SUMMARY
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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 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 For a closer look at the different stages of a Stock Split go to: https://prorightline.com/index.php/trading-stock-splits-stages/ ======================================================================
Best of luck and have a Great Week!
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The RightLine Report is an information service for investors and traders. It is not a solicitation nor a recommendation or offer to buy or sell securities. The information provided is obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. The publishers of The RightLine Report are not brokers or financial advisors, and are not acting in any way to influence the purchase or sale of any security. Stock picks, entry points and exit points should be considered an information resource to assist the trader in developing a trading plan and it is the sole responsibility of the reader to conduct his or her own due diligence before executing a trade. Trading securities should be considered speculative with a high degree of volatility and risk. The publishers of The RightLine Report recommend that anyone trading securities should do so with caution, exercise prudent trading discipline and have a personal risk management strategy in place before doing so. It is possible at this or some subsequent date, the publishers and staff of The Pro Right Line Corp. may own, buy or sell securities presented. The Pro Right Line Corp. is not a financial advisory service. Its publishers, owners or investors, are not liable for any losses or damages, monetary or otherwise, that result from the content of The RightLine Report. Past RightLine Report performance may not be indicative of future performance. All subscriptions and/or use of the RightLine.net website are subject to RightLine's "Terms of Use" and "Subscriber Terms & Conditions" which are posted at www.rightline.net. Any REDISTRIBUTION of the above information, without The RightLine's written consent, is STRICTLY PROHIBITED. Copyright / The Pro Right Line Corporation - All Rights Reserved To Unsubscribe, send an email to cs@prorightline.com or call 800-737-4518. |