Notes From The Editor

"Think education is expensive? Try ignorance." RightLine took this bit of wisdom to heart in 1997 and turned it into a company trademark.

Since then we have emphasized a personal trading education as a gateway to financial improvement. Being students of the market, we're always learning. Every day presents new challenges, and within the challenges we find new opportunities. Granted, it does take effort to get an education, yet as the saying goes, it's much less expensive than ignorance.

Unfortunately most investors do "try ignorance" - although unknowingly.

And while some uninformed folks view trading stocks as a type of gambling, their lack of understanding usually keeps them from accessing the most valuable profit-producing tools and training available anywhere.

Trading is an extremely valuable resource for any student of the market, because teaches profit skills efficiently. I know of no better way to compact as much usable experience into such a short period of time.

Once you've learned how to trade, you can apply your skills to any time frame - from minutes to years.

The repetition of strategic planning, entering positions under live conditions, implementing risk control, and managing trades sharpens your abilities faster than most people would ever imagine.

Just remember to be patient with yourself. Learning this craft requires several years to reach a high level of consistent performance - even if you are a fast learner.

Regardless of the way anyone chooses to learn or how they perceive the rise and fall of stock prices, we can be certain that market cycles will continue to repeat themselves. There will be varying degrees of increase and decline between the reversal levels, but the up and down cycles are sure to continue in all time frames.

And since they always do, it follows that if we want to make money in the market, the best role to assume is that of a student. Why? Because this point of view allows us to use the knowledge we accumulate to improve our skills. Students are willing to accept mistakes as part of the learning process and make adjustments along the way.

The knowledge gained in the student role is powerful. It allows us to assign significant value to the experience of the journey as well as the destination. The benefits of doing that are real, and once prepared you can literally name your own price.

Trade well!

Thomas Sutton, Editor

Quick List

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

JAKK      21.13      0.58      21.5                  1.54/0.77      1.46
DCOM      22.40      0.51      22.7     21.22        1.48/0.74       2.3
STVN      20.20      0.58     20.65                  1.72/0.86       2.4
DNLI      22.28      0.60     22.98                  1.89/0.95      2.18
NRIX      20.16      0.15     20.68     19.07        1.61/0.81      3.06

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

Major equity markets closed higher on Thursday, with large-cap stocks outpacing small and mid-cap stocks. Technology, communication services, and industrial sectors led the advance. Bond yields resumed their recent upward trend, with the 10-year Treasury yield reaching approximately 3.99%. In global markets, Asia was mostly lower as investors evaluated weaker-than-expected trade data from Japan, while Europe showed mixed results after recent gains. The USD/dollar strengthened against major currencies. In commodities, both WTI oil and gold saw price increases.

With 89% of S&P 500 companies reporting second-quarter earnings, the results continue to impress. Approximately 78% of these companies have exceeded analyst expectations, delivering an average upside surprise of 3.3%. Year-over-year earnings growth for the quarter stands at 10.6%, the highest rate since the fourth quarter of 2021. Broad sector performance is evident, with nine of the 11 sectors reporting year-over-year earnings increases. This broadening of earnings performance could allow lagging sectors to catch up to technology and communication services, which have driven market gains.

Weekly jobless claims dropped to 233,000, better than the expected 240,000. This provides some relief following the July jobs report, which revealed a higher-than-expected unemployment rate of 4.3%, raising recession concerns. The jobless claims data supports the view that the labor market is gradually cooling but remains stable, which aligns with the "soft landing" narrative for the economy and moderating inflation. Softer wage growth typically leads to lower services inflation, reinforcing expectations that the Federal Reserve will cut interest rates soon. Current market expectations anticipate Fed rate cuts to begin in September.

                        Aug 7, 2024            Aug 8, 2024    
                  --------------------   --------------------
Dow                 38,763.45  -234.21     39,446.49   683.04
Nasdaq              16,195.81  -171.05     16,660.02   464.22
S&P 500              5,199.50   -40.53      5,319.31   119.81

NYSE Volume                      4.56B                  4.02B
NYSE Advancers                   1,189                  2,266
NYSE Decliners                   1,626                    560

Nasdaq Volume                    5.93B                  5.84B
Nasdaq Advancers                 1,370                  3,133
Nasdaq Decliners                 2,848                  1,129

                                 New Highs/Lows

                   08/01  08/02  08/05  08/06  08/07  08/08
                 --------------------------------------------
NYSE New Highs       208    158     42     49     99     35
NYSE New Lows         53    116    221     54     58     48
Nasdaq New Highs     107    111     90     44     47     51
Nasdaq New Lows      178    330    594    144    191    195
   

TRADER'S TIP: "Profits Improve With Technical Timing"

Regardless of the reasons you decide to buy a stock, Technical Analysis is always helpful when it comes to timing entries. Support and resistance on the charts may be unfamiliar to most investors, but they have a huge impact on stock price movement.

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. 5					
9:45 am	S&P final U.S. services PMI	
10:00 am	ISM services	July
			
TUESDAY, Aug. 6					
8:30 am	U.S. trade deficit	

WEDNESDAY, Aug. 7					
3:00 pm	Consumer credit	

THURSDAY, Aug. 8					
8:30 am	Initial jobless claims			
10:00 am	Wholesale inventories	
3:00 pm	Richmond Fed President Tom Barkin speaks
				
FRIDAY, Aug. 9					
None scheduled

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

TRADER'S TIP: "When Half Is Better"

If you have any doubt about a trade, or think your position size may be too large, either cut it in half or exit entirely. It's much better to end up with half or less of the desired profit than to take twice the unwanted loss. In any case, don't risk more than you can afford to give up without pain, for when it comes to the stock market, things can change very quickly.

Stocks Covered in This Issue

CONSUMER CYCLICAL SECTOR

JAKKS Pacific, Inc. (JAKK: Consumer Cyclical/Leisure) - 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 JAKK which met our setup criteria on Thursday. The BUY trigger for this trade is at 21.5, and the trailing stop is sized at 1.54. Resize the stop to 0.77 upon collecting a 1.46 point gain. JAKK closed Thursday at 21.13. Earnings Report Date: Oct 30, 2024. Beta: 2.38. Market-Cap: 232.094M. Optionable.

FINANCIAL SERVICES SECTOR

Dime Community Bancshares, Inc. (DCOM: Financial Services/Banks - Regional) - SQUEEZE PLAY. Traders are feeling the pressure as DCOM'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 22.7 and a SELL short entry at 21.22. DCOM'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 2.3 gain. DCOM closed Thursday at 22.40. Earnings Report Date: Oct 17, 2024. Beta: 1.10. Market-Cap: 876.929M. Optionable.

HEALTHCARE SECTOR

Stevanato Group S.p.A. (STVN: Healthcare/Medical Instruments & Supplies) - 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. STVN's reaction to support on Thursday created a Bullish Bounce setup with a BUY entry trigger at 20.65. Use a 1.72 trailing stop, which should work well with STVN's typical daily range. Tighten it to 0.86 on a 2.4 profit. STVN closed at 20.20 on Thursday. Earnings Report Date: N/A. Beta: 0.58. Market-Cap: 5.512B. Optionable.

Denali Therapeutics Inc. (DNLI: Healthcare/Biotechnology) - BULLISH BOUNCE. Entering a position in the early stages of a bounce is great way to get on board an up-trending stock. The "Bullish Bounce" setup identifies probable candidates by evaluating the trading action that takes place near support levels. DNLI's behavior on Thursday could very well be a sign that a new bounce is underway. Place a BUY trigger at 22.98. In the event your trigger is met, also place a 1.89 trailing stop which can be trimmed down to 0.95 when you have a 2.18 profit. DNLI closed Thursday at 22.28. Earnings Report Date: Nov 5, 2024. Beta: 1.39. Market-Cap: 3.19B. Optionable.

Nurix Therapeutics, Inc. (NRIX: Healthcare/Biotechnology) - SQUEEZE PLAY. NRIX 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 20.68 and a SELL short entry at 19.07. Once your trade is filled, enter a 1.61 trailing stop. Tighten it to 0.81 after a 3.06 gain. NRIX closed on Thursday at 20.16. Earnings Report Date: Oct 10, 2024. Beta: 2.22. Market-Cap: 1.299B. 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.

Disclaimer

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