Notes From The Editor

Once in a while life seems to smack you in the face with a reminder that time really does fly. It might be a high school reunion, a birthday, or some other milestone. I had one of those moments not long ago when I caught up with an old roommate from college. Thinking back on those days, it seemed like a just a few years had gone by. It's funny how the brain perceives different memories - some are distant and faint, some are always vivid and fresh.

These types of moments tend to put me in a contemplative mood and make me analyze life from a longer-term perspective. Living on a day-to-day basis, it's always good to occasionally kick back, smell the roses, and look at the bigger picture.

One of the turning points in my trading career was learning to "step outside" the day-to-day events and focus on my longer-term results. When you're trading on a daily basis, each session can be chalked up as a victory or defeat - depending on whether money was won or lost. But putting too much emphasis on what happens every day can overshadow the ultimate, more important goal: consistently making money.

Setting weekly, monthly, and yearly goals is a great way to focus on the long-term. Think of each day as a stepping-stone on the path to the weekly objective. This is especially important for daytraders who enter and exit several positions during every session; keeping the weekly goal in mind helps to keep emotions in check during winning or losing streaks.

For traders without several years of experience, it can be difficult to know whether a yearly objective is reasonable. Consider starting with monthly goals, which are easier to gauge. They also provide more immediate feedback, since you only have to go through four weeks of trading to see whether the goal was met or exceeded.

These targets represent a destination to work toward on the day-to-day journey. It's a satisfying feeling to meet or exceed a goal. A shortfall, on the other hand, can be very instructive - it's a signal to step back and analyze what's working and what isn't.

From personal experience, habits that eat away at profitability - failing to use risk management, over-sizing positions, and so on - are among the biggest reasons for shortfalls. Once those habits are identified and corrected, you'll be on a much smoother road to consistent profits.

Here's to profits,

Kent Barton
Senior Analyst

Quick List

    
Stock     08/29     08/29      Buy      Short   Trailing Stops     Gain 
Symbol    Price      +/-      Entry     Entry   Initial/Tighten   Amount 
------  --------  --------  --------  --------  ---------------  --------

TYRA      22.13      0.80     22.48                  1.62/0.81      2.74
NUTX      21.86      0.51     22.99     20.02        2.97/1.49       2.5
LENZ      22.10      0.00     22.54      21.3        1.24/0.62       3.2
TPC       23.18     -0.03        24     22.41         1.59/0.8      3.22
DOC       22.13      0.09     22.45                  1.45/0.73      0.92

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

Stock markets showed mixed results on Thursday, with the Dow Jones advancing while the S&P 500 and the tech-heavy Nasdaq edged lower. The market reaction was influenced by NVIDIA's earnings report, which fell short of the high expectations set by investors. NVIDIA reported a substantial 122% increase in quarterly revenue, though this was a slowdown from the previous quarter's 262% growth, suggesting a deceleration in its exceptional performance. Despite this week's 8.5% decline, NVIDIA's stock is still up over 140% for the year.

On a broader scale, the S&P 500 remains up more than 17% in 2024, bolstered by a solid economic backdrop. Inflation appears to be moderating, the Federal Reserve is expected to cut interest rates later in the year, and the economy seems poised for a soft landing. Although the pace of stock gains may slow and volatility could return, the foundational elements of this bull market appear robust.

With over 98% of S&P 500 companies having reported, second-quarter earnings growth is on track for approximately 11.3% year-over-year, surpassing the 8.8% growth anticipated at the end of the first quarter. About 79% of companies have reported positive earnings surprises, exceeding the 10-year average of 74%* Notably, the sectors delivering the largest earnings surprises include utilities, health care, and financials, rather than the usual growth areas like technology or communication services.

While earnings growth projections for the third and fourth quarters have been revised downward, overall earnings growth for the year is still expected to exceed 10%, a significant improvement over last year's 1% growth rate. We believe that the broad-based earnings growth this year is a key factor supporting strong equity market performance and foresee a reasonable outlook for double-digit earnings growth in both 2024 and 2025.

TRADER'S TIP: "Stocks, Motion, and Consolidation"

As Newton's Theory describes, an object in motion tends to remain in motion. In a similar fashion, once a trend is underway, it usually remains in motion with periodic periods of rest and consolidation. This is the reason that stocks generally leave a period of consolidation in the same direction that they entered it. Unless evidence based on chart action indicates otherwise, it is usually a good idea to trade in the direction of a stock prior to its entry into consolidation.

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".

Market Calendar

ECONOMIC REPORTS AND EVENTS (all times are Eastern):    

MONDAY, Aug. 26					
8:30 am	Durable-goods orders	
8:30 am	Durable-goods minus transportation	
2:00 pm	San Francisco Fed President Daly TV interview
				
TUESDAY, Aug. 27					
9:00 am	S&P Case-Shiller home price index 
10:00 am	Consumer confidence

WEDNESDAY, Aug. 28					
6:00 pm	Atlanta Fed President Raphael Bostic speech
				
THURSDAY, Aug. 29					
8:30 am	Initial jobless claims	
8:30 am	Advanced U.S. trade balance in goods
8:30 am	Advanced retail inventories	
8:30 am	Advanced wholesale inventories	
8:30 am	GDP (2nd revision)
10:00 am	Pending home sales	
3:30 pm	Atlanta Fed President Raphael Bostic speech
				
FRIDAY, Aug. 30					
8:30 am	Personal income (nominal)	
8:30 am	Personal spending (nominal)	
8:30 am	PCE index]	
8:30 am	PCE (year-over-year)		
8:30 am	Core PCE index	
8:30 am	Core PCE (year-over-year)			
9:45 am	Chicago Business Barometer (PMI)	
10:00 am	Consumer sentiment (final)	

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

TRADER'S TIP: "What Can I Learn From This Trade?"

This is where the rubber meets the road! Although a trade may end when you exit the position that is often when the learning begins. One popular definition of insanity is continuing to act in the same way but expecting different results. A trading journal or diary will help answer the questions, "Now that I see the past with 20/20 vision, what would I have done differently? What did I do right? Did my emotional state of mind affect my success? Did I follow my trading plan? Did I set my stop at reasonable level?"

When you review your trades after the fact, it's amazing how easy it is to find a nugget of information that will help you with your next trades. We can't force stocks to do what we want them to, but we can learn to work with what a stock gives us. Moreover, the difference between progress and stagnation is our ability to learn from our experiences.

Stocks Covered in This Issue

HEALTHCARE SECTOR

Tyra Biosciences, Inc. (TYRA: Healthcare/Biotechnology) - BULLISH BOUNCE. Some people hear of a stock that's performing nicely and then buy it without any regard for timing the entry. This approach usually leaves money on the table, money that could just as well be added to profits. The Bullish Bounce setup provides a well timed entry and reduces exposure to risk by placing both the entry trigger and exit stop near the bottom of the bounce. We have an opportunity to use this approach with TYRA which met our setup criteria on Thursday. The BUY trigger for this trade is at 22.48, and the trailing stop is sized at 1.62. Resize the stop to 0.81 upon collecting a 2.74 point gain. TYRA closed Thursday at 22.13. Earnings Report Date: N/A. Beta: 1.02. Market-Cap: 1.169B. Optionable.

Nutex Health Inc. (NUTX: Healthcare/Health Information Services) - SQUEEZE PLAY. When a stock's daily price range contracts to an unusually low point, you can safely assume that in most cases a breakout from that range will result in a nice price move. To capture a portion of this potential movement we have set both a long and a short entry into NUTX. A move to the upside will trigger our BUY entry at 22.99, while a drop to 20.02 will trigger our SELL short entry. Follow your position with a 2.97 trailing stop. Tighten the stop to 1.49 once you have a 2.5 gain. NUTX closed Thursday at 21.86. Earnings Report Date: Nov 7, 2024. Beta: 1.55. Market-Cap: 110.736M. Optionable.

LENZ Therapeutics, Inc. (LENZ: Healthcare/Biotechnology) - 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 LENZ's case we will enter a BUY should it reach the 22.54 level, or a SELL short trade if it drops to 21.3. As usual a trailing stop is essential, 1.24 which should be tightened to 0.62 on a 3.2 gain. LENZ closed Thursday at 22.10. Earnings Report Date: N/A. Beta: --. Market-Cap: 607.078M. Optionable.

INDUSTRIALS SECTOR

Tutor Perini Corporation (TPC: Industrials/Engineering & Construction) - SQUEEZE PLAY. Trader indecision has put TPC 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 24 and a SELL short entry at 22.41. Now it's up to TPC to show us which entry will be filled. Once the trade is underway place a 1.59 trailing stop, which can be tightened to 0.8 after you achieve a 3.22 profit. TPC closed on Thursday at 23.18. Earnings Report Date: Nov 8, 2024. Beta: 1.55. Market-Cap: 1.214B. Optionable.

REAL ESTATE SECTOR

Healthpeak Properties, Inc. (DOC: Real Estate/REIT - Healthcare Facilities) - 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. DOC's reaction to support on Thursday created a Bullish Bounce setup with a BUY entry trigger at 22.45. Use a 1.45 trailing stop, which should work well with DOC's typical daily range. Tighten it to 0.73 on a 0.92 profit. DOC closed at 22.13 on Thursday. Earnings Report Date: N/A. Beta: 1.10. Market-Cap: 15.472B. 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  
---------------- -------     --------    -------     ------  -------   

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.

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