August 22, 2023 - The RightLine Report 

 
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                      NOTES FROM THE EDITOR
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Trading stocks is much more rewarding when you view it as a means of self-improvement rather than just a way to earn money. It makes sense when you think about it. Money is a result of learning to trade well, and the process of learning to trade well requires us to improve on a number of important levels.

This means we have to change the way we think and act.

Most traders would agree that making the changes necessary to be a successful stock trader is desirable. However, just because something is "desirable" doesn't mean we're willing to make the effort necessary to change the way we feel about it.

For instance, the majority of people are of the opinion that a Bull market is the only market where profits can be made. Bull equals good, and bear equals bad, right?

Wrong. While the rest of the world may view the markets this way, you already know it isn't true for traders who have learned how to take advantage of both up and down trends. And though there are plenty of reasons why the majority of investors prefer bull markets, many of these "reasons" are simply one-dimensional beliefs that limit opportunity.

The process of moving beyond our trading limitations involves becoming aware of the false assumptions and bias we each have. Once we become conscious of the mental and emotional limits that exist inside of us, we can go about the business of upgrading our perspectives.

Learning how to view market action as neither good nor bad begins with paying attention to your feelings. Notice and accept how you feel when the market goes up, and when it goes down. Then remind yourself that you can choose to perceive market movement any way you want to.

When the market goes down, focus on the fact that a down market presents just as much opportunity as an up market. Be persistent. It can take months to replace limiting beliefs with new and more effective ones. Realize that although all of us have been taught that "down" is our enemy, "down" is actually is just as much our ally as "up."

The trend really is your friend ... even when the trend is down. It takes practice to accept all price movement as opportunity, yet this is a necessary step toward bringing about the changes in thinking that produce consistent success.

Trade well!

- Thomas Sutton, Editor 

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                           "QUICK LIST"
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Stock     08/22     08/22      Buy      Short   Trailing Stops     Gain 
Symbol    Price      +/-      Entry     Entry   Initial/Tighten   Amount 
------  --------  --------  --------  --------  ---------------  --------

BOOM      23.83     -0.25     24.37     22.77          1.6/0.8      1.36
URGN      20.27     -0.07     21.06      19.1        1.96/0.98      4.92
IMVT      20.57     -0.01     21.26     19.78        1.48/0.74      1.68
WLDN      22.99      0.03     23.38                   1.5/0.75      2.52
FROG      27.20      0.20     27.76     26.18        1.58/0.79      2.18


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 concluded the day with losses on Tuesday due to mixed outcomes from US department-store earnings. Macy's, a prominent retailer, reported higher-than-expected credit card delinquencies in the second quarter, raising concerns about the resilience of the consumer. Adding to the dampened sentiment, S&P Global downgraded the ratings of five regional banks on Monday, causing the financials sector to decline by nearly 1% by the close of Tueday's trading session. S&P Global cited elevated funding costs and worries about profitability in the current higher-interest-rate environment as the main reasons for the downgrade.

In the commodities arena, the day witnessed a mix of results, with slight declines in oil prices and modest gains in gold.

Momentum in rates took a pause Tuesday, with the 10-year Treasury yield remaining stable above 4.3% after reaching a 16-year high earlier this week. While the previous year's surge in rates was fueled by substantial inflation, the recent upward trajectory over the past couple of months has been fueled by unexpectedly robust economic performance. This has reinforced the argument for the Federal Reserve to maintain its tight policy stance for an extended period.

All eyes are on Fed Chair Powell's annual speech at Jackson Hole this Friday, as investors seek more clarity on the central bank's intentions regarding future rate decisions. It's our view that there's credible support for the Fed to stay on hold for the remainder of the year given the downward trend in inflation. Nevertheless, considering the distance still to go in bringing inflation back in line with the Fed's 2% target, another rate hike can't be entirely ruled out. This possibility is particularly relevant if wage growth remains high and persistent shelter prices hinder a broader moderation in consumer prices.


                       Aug 21, 2023           Aug 22, 2023   
                  --------------------   --------------------
Dow                 34,463.69   -36.97     34,288.83  -174.86
Nasdaq              13,497.59   206.81     13,505.87     8.28
S&P 500              4,399.77    30.06      4,387.55   -12.22

NYSE Volume                      3.75B                  3.54B
NYSE Advancers                   1,113                  1,238
NYSE Decliners                   1,804                  1,672

Nasdaq Volume                    4.38B                  4.29B
Nasdaq Advancers                 2,074                  1,765
Nasdaq Decliners                 2,264                  2,526

                                 New Highs/Lows

                   08/15  08/16  08/17  08/18  08/21  08/22
                 --------------------------------------------
NYSE New Highs        34     42     19     16     31     37
NYSE New Lows         80     95     88     92     87     81
Nasdaq New Highs      66     45     30     32     44     43
Nasdaq New Lows      224    284    291    263    215    242

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                              TRADER'S TIP:  
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TRADER'S TIP: "Staying Focused On What You Need To Learn"

"There is a tremendous difference between focusing on money and focusing on using your trading as an exercise to identify what you need to learn. The first will cause you to focus on what the markets are giving you or are taking away from you. The second perspective causes you to focus your attention on your ability to give yourself money. With the first perspective, you are placing some of the responsibility onto the markets to do something for you. With the second perspective, you assume all the responsibility."

~ Mark Douglas, "The Disciplined Trader" 
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                         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 - 4387.55 August 22, 2023

52-Week High: 4607.07
52-Week Low: 3491.58
Daily Trend: DOWN
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 4708.48
Resistance 2: 4553.46
Resistance 1: 4461.58
Pivot: 4398.45
Support 1: 4306.57
Support 2: 4243.43
Support 3: 4088.41
https://www.prorightline.com/rlch/082223SPX.jpg

NASDAQ Composite - 13505.87 August 22, 2023

52-Week High: 14446.55
52-Week Low: 10088.83
Daily Trend: DOWN
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 14668.70
Resistance 2: 14041.30
Resistance 1: 13666.04
Pivot: 13413.90
Support 1: 13038.64
Support 2: 12786.50
Support 3: 12159.10


Dow Industrials - 34288.83 August 22, 2023

52-Week High: 35679.13
52-Week Low: 28660.94
Daily Trend: DOWN
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 36844.28
Resistance 2: 35772.02
Resistance 1: 35136.34
Pivot: 34699.76
Support 1: 34064.08
Support 2: 33627.50
Support 3: 32555.24


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                             MARKET CALENDAR
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--ECONOMIC REPORTS AND EVENTS (all times are Eastern): 
Wednesday, August 23, 2023:
23-Aug  9:45 am   S&P flash U.S. services PMI
23-Aug  9:45 am   S&P flash U.S. manufacturing PMI
23-Aug  10:00 am   New home sales

Thursday, August 24, 2023:
24-Aug  8:30 am   Initial jobless claims
24-Aug  8:30 am   Durable-goods orders
24-Aug  8:30 am   Durable-goods minus transportation

Friday, August 25, 2023:
25-Aug  10:00 am   U Mich consumer sentiment, final

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: "Use More Than One Indicator"

Instead of relying on just one indicator to make trade decisions, use several as part of your overall strategy. Watch for a convergence of signals because it increases the odds of the expected outcome. 

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                      STOCKS COVERED IN THIS ISSUE    
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ENERGY SECTOR

DMC Global Inc. (BOOM: Energy/Oil & Gas Equipment & Services) - SQUEEZE PLAY. Tuesday's narrow price range has created a potentially profitable setup in BOOM, 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 24.37 and a SELL short entry at 22.77. Let BOOM's price action determine your long or short entry. Once the order is filled, place a 1.6 trailing stop, and tighten it to 0.8 upon getting a 1.36 gain. BOOM closed Tuesday at 23.83. Earnings Report Date: Nov 01, 2023. Beta: 1.66. Market-Cap: 470.983M. Optionable.

HEALTHCARE SECTOR

UroGen Pharma Ltd. (URGN: Healthcare/Biotechnology) - SQUEEZE PLAY. URGN 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 21.06 and a SELL short entry at 19.1. Once your trade is filled, enter a 1.96 trailing stop. Tighten it to 0.98 after a 4.92 gain. URGN closed on Tuesday at 20.27. Earnings Report Date: Nov 08, 2023. Beta: 0.91. Market-Cap: 613.834M. Optionable.

Immunovant, Inc. (IMVT: Healthcare/Biotechnology) - SQUEEZE PLAY. Traders are feeling the pressure as IMVT'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 21.26 and a SELL short entry at 19.78. IMVT's price movement will decide which entry is filled. As soon as you're in the trade, enter a 1.48 trailing stop. Tighten it to 0.74 after you get a 1.68 gain. IMVT closed Tuesday at 20.57. Earnings Report Date: Nov 02, 2023. Beta: 0.95. Market-Cap: 2.688B. Optionable.

INDUSTRIALS SECTOR

Willdan Group, Inc. (WLDN: Industrials/Engineering & Construction) - BULLISH BOUNCE. Everyone familiar with price charts knows that a stock tends to bounce its way higher rather than move in a straight line. The lower levels of these short-term rebounds offer a safe and often early entry into stocks that are in the process of establishing longer-term uptrends. WLDN's reaction to support on Tuesday created a Bullish Bounce setup with a BUY entry trigger at 23.38. Use a 1.5 trailing stop, which should work well with WLDN's typical daily range. Tighten it to 0.75 on a 2.52 profit. WLDN closed at 22.99 on Tuesday. Earnings Report Date: Nov 01, 2023. Beta: 1.36. Market-Cap: 312.549M. Optionable.

TECHNOLOGY SECTOR

JFrog Ltd. (FROG: Technology/Software-Application) - SQUEEZE PLAY. A look at FROG's daily chart shows what a price squeeze is all about. The constricted high-low daily trading range has produced a setup similar to a tightly coiled spring. Expect price to move sharply soon, with the direction yet to be determined. Let the upcoming market action resolve whether you will buy shares or sell short. To capture a move either way, place a BUY trigger at 27.76 and a SELL short trigger at 26.18. Once FROG shows which way it's headed, place your triggered entry order. As soon as your order is filled, follow with a trailing stop of 1.58 and tighten to 0.79 on a 2.18 gain. FROG closed Tuesday at 27.20. Earnings Report Date: Oct 31, 2023. Beta: 0.55. Market-Cap: 2.823B. 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/ 

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                           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  
---------------- -------     --------    -------     ------  -------   

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.

For a closer look at the different stages of a Stock Split go to: https://prorightline.com/index.php/trading-stock-splits-stages/ 
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