August 3, 2023 - The RightLine Report 

 
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                      NOTES FROM THE EDITOR
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We recently covered three common pitfalls that can trap traders, making it more difficult to succeed over the long-run. Let's look at two more of these mistakes. What are their causes, and how can they be avoided?

Mistake #4: Failing to control your emotions.

Unless you happen to be a robot with an unfeeling CPU brain, your trading successes and failures will produce an emotional reaction. For example, imagine that you're on a nice winning streak. You've had three winning trades in a row, each producing a larger profit than the last. You feel excited and even a bit elated. Your trading strategy is paying off! However, the problem emerges when your start to become careless. You feel a bit invincible, as if you suddenly have this all figured out. You start to let greed influence your decisions, jumping into less-than-promising trades and failing to use solid risk management. The resulting carelessness quickly leads to a string of losing trades - and before you know it, your winnings have been erased.

Dangers also arise when fear enters the equation; it clouds your decision-making and leads to trading that is based on your emotions, rather than the price action. Thinking less rationally, you might bail out of profitable positions before they've realized their full potential, or sell a position for a loss even though it hasn't triggered your stop. Not a good state of affairs.

The solution is to have a trading system that's emotion-proof. There's tremendous value in setting rules for yourself. Always use risk management strategies, regardless of how you're feeling at the time. And always, always honor your stops.

Also make it a point to become more self-aware; it's okay to feel those fundamental emotions (hey, that's what makes us human!), as long as you remember to insulate them from your trading.

Mistake #5: Holding on to losing positions.

One of the most frustrating aspects of trading is when you sell out of a position for a loss, only to see it snap back and move in the direction you originally thought it would. "Arrgh," you think, "if I just would've held on a bit longer, I would've been fine!"

This line of thinking can get you into a heap of trouble.

While some trades will bounce back after you're stopped out, there are also cases where a stock will keep moving against you. As you continue to hold out for a rebound and recovery, your losses mount. What was a manageable loss may turn into a sizeable hit to your account.

The cure to this malady is simple: don't hold on to losers! Start each and every trade with a clearly-defined stop. If that level is violated, you're out of the position with your skin intact, ready to move on. Also consider placing that stop-loss with your brokerage - what's known as a "hard stop" - to remove all guesswork from the equation.

In the next RightLine Report we'll explore more of these common trading traps. While the market landscape is littered with obstacles, the good news is that you can spot them on the horizon, steer clear, and continue your journey to lasting success.

Here's to profits,

Kent Barton
Senior Analyst 

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                           "QUICK LIST"
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Stock     08/03     08/03      Buy      Short   Trailing Stops     Gain 
Symbol    Price      +/-      Entry     Entry   Initial/Tighten   Amount 
------  --------  --------  --------  --------  ---------------  --------

INBK      22.45      0.37     22.96     21.26         1.7/0.85      1.46
HROW      21.42      0.29     21.73                  1.37/0.69      2.32
TWST      20.67     -0.72     21.78     19.85        1.93/0.97      2.92
ASAN      22.06     -0.53     22.99     21.38        1.61/0.81      2.08
EBIX      27.07     -0.75        28     25.67        2.33/1.17      4.32


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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On Thursday, the major US stock indexes faced another challenging day as traders refocused on quarterly earnings and anticipated Friday's jobs report. The recent surprise credit rating downgrade for the USA by Fitch Ratings added to market volatility, and 10-year Treasury yields reached their highest level in almost 10 months. Interestingly, US government bonds were still perceived as a safe haven despite the credit-rating agency's assessment of the country's debt.

The July Employment Report from the Labor Department, set to be released on Friday, will be crucial for determining the market's short-term direction. The wage data in the report will be closely analyzed for clues about potential future interest rate hikes by the Federal Reserve. If the job growth and unemployment numbers grab headlines, the wage data could also play a significant role in shaping the market's reaction. Positive wage numbers might raise concerns about more aggressive rate hikes from the Fed.

Energy emerged as one of the strongest sectors on Thursday, fueled by nearly a 3% surge in crude oil futures. Consumer Discretionary shares and regional bank stocks also recovered from the previous day's losses. However, Utilities were among the weakest sectors, with the Philadelphia Utility Index (UTY) reaching a near four-week low.


                       Aug 2, 2023            Aug 3, 2023    
                  --------------------   --------------------
Dow                 35,282.52  -348.16     35,215.89   -66.63
Nasdaq              13,973.45  -310.47     13,959.72   -13.73
S&P 500              4,513.39   -63.34      4,501.89   -11.50

NYSE Volume                      4.28B                  4.15B
NYSE Advancers                     664                  1,117
NYSE Decliners                   2,280                  1,820

Nasdaq Volume                     5.5B                  6.06B
Nasdaq Advancers                 1,223                  1,987
Nasdaq Decliners                 3,141                  2,403

                                 New Highs/Lows

                   07/27  07/28  07/31  08/01  08/02  08/03
                 --------------------------------------------
NYSE New Highs       151    119    152    107     65     76
NYSE New Lows         17     12      8     17     33     46
Nasdaq New Highs     171    126    149    101     56     60
Nasdaq New Lows      109     85     64     93    123    108

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                              TRADER'S TIP:  
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TRADER'S TIP: "Mistakes"

"The greatest mistake you can make in life is to be continually fearing you will make one."

~ Elbert Hubbard 
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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 - 4501.89 August 3, 2023

52-Week High: 4607.07
52-Week Low: 3491.58
Daily Trend: DOWN
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 4729.63
Resistance 2: 4651.12
Resistance 1: 4616.67
Pivot: 4572.62
Support 1: 4538.17
Support 2: 4494.11
Support 3: 4415.60
https://www.prorightline.com/rlch/080323SPX.jpg

NASDAQ Composite - 13959.72 August 3, 2023

52-Week High: 14446.55
52-Week Low: 10088.83
Daily Trend: DOWN
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 14950.80
Resistance 2: 14587.73
Resistance 1: 14452.19
Pivot: 14224.66
Support 1: 14089.12
Support 2: 13861.59
Support 3: 13498.52


Dow Industrials - 35215.89 August 3, 2023

52-Week High: 35679.13
52-Week Low: 28660.94
Daily Trend: UP
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 36297.94
Resistance 2: 35869.17
Resistance 1: 35664.23
Pivot: 35440.40
Support 1: 35235.46
Support 2: 35011.63
Support 3: 34582.86


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                             MARKET CALENDAR
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--ECONOMIC REPORTS AND EVENTS (all times are Eastern): 
Monday, July 31, 2023:
31-Jul  MONDAY, JULY 31   
31-Jul  8:30 am   Chicago Business Barometer
31-Jul  2:00 pm   Fed senior loan survey
31-Jul  TUESDAY, AUGUST 1   

Tuesday, August 01, 2023:
01-Aug  10:00 am   Job openings
01-Aug  10:00 am   ISM manufacturing
01-Aug  10:00 am   Construction spending
01-Aug  WEDNESDAY, AUGUST 2   

Wednesday, August 02, 2023:
02-Aug  8:15 am   ADP employment
02-Aug  THURSDAY, AUGUST 3   

Thursday, August 03, 2023:
03-Aug  8:30 am   Initial jobless claims
03-Aug  8:30 am   U.S. Productivity (prelim)
03-Aug  10:00 am   ISM services
03-Aug  10:00 am   Factory orders
03-Aug  FRIDAY, AUGUST 4   

Friday, August 04, 2023:
04-Aug  8:30 am   U.S. nonfarm payroll
04-Aug  8:30 am   U.S. unemployment rate
04-Aug  8:30 am   U.S. hourly wages
04-Aug  8:30 am   Hourly wages year over year

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: "Monthly Stock Options Expirations"

US stock options expire at 11:59AM on the third Saturday of each month. Since most retail traders can't trade options on Saturday, this equates to 4:00pm Eastern Time closing bell. This date changes to the third Thursday at 4:00pm whenever Friday is a holiday. 

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                      STOCKS COVERED IN THIS ISSUE    
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FINANCIAL SERVICES SECTOR

First Internet Bancorp (INBK: Financial Services/Banks-Regional) - SQUEEZE PLAY. Thursday's narrow price range has created a potentially profitable setup in INBK, 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 22.96 and a SELL short entry at 21.26. Let INBK's price action determine your long or short entry. Once the order is filled, place a 1.7 trailing stop, and tighten it to 0.85 upon getting a 1.46 gain. INBK closed Thursday at 22.45. Earnings Report Date: Oct 17, 2023. Beta: 0.61. Market-Cap: 199.928M. Optionable.

HEALTHCARE SECTOR

Harrow Health, Inc. (HROW: Healthcare/Drug Manufacturers-Specialty & Generic) - BULLISH BOUNCE. This trader-friendly setup turns repetitive stock behavior into real profits. Based on the tendency for up-trending stocks to drop briefly and then resume the up-trend, the Bullish Bounce places traders into excellent stocks when conditions are primed for more skyward movement. HROW's current price action near moving average support signals a potential BUY entry at 21.73, followed by a 1.37 trailing stop which can be tightened to 0.69 upon earning 2.32. HROW closed Thursday at 21.42. Earnings Report Date: Aug 09, 2023. Beta: 0.19. Market-Cap: 728.309M. Optionable.

Twist Bioscience Corporation (TWST: Healthcare/Diagnostics & Research) - SQUEEZE PLAY. TWST 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 21.78 and a SELL short entry at 19.85. Once your trade is filled, enter a 1.93 trailing stop. Tighten it to 0.97 after a 2.92 gain. TWST closed on Thursday at 20.67. Earnings Report Date: Aug 04, 2023. Beta: 1.25. Market-Cap: 1.181B. Optionable.

TECHNOLOGY SECTOR

Asana, Inc. (ASAN: Technology/Software-Application) - SQUEEZE PLAY. Traders are feeling the pressure as ASAN's intra-day price range on Thursday 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 22.99 and a SELL short entry at 21.38. ASAN's price movement will decide which entry is filled. As soon as you're in the trade, enter a 1.61 trailing stop. Tighten it to 0.81 after you get a 2.08 gain. ASAN closed Thursday at 22.06. Earnings Report Date: Sep 05, 2023. Beta: 1.21. Market-Cap: 4.783B. Optionable.

Ebix, Inc. (EBIX: Technology/Software-Application) - SQUEEZE PLAY. A look at EBIX'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 28 and a SELL short trigger at 25.67. Once EBIX shows which way it's headed, place your triggered entry order. As soon as your order is filled, follow with a trailing stop of 2.33 and tighten to 1.17 on a 4.32 gain. EBIX closed Thursday at 27.07. Earnings Report Date: Aug 09, 2023. Beta: 2.45. Market-Cap: 836.501M. 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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Best of luck and have a Great Week!
 
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