August 9, 2022 - The RightLine Report

                      NOTES FROM THE EDITOR

It wasn't too many years ago that short-term traders were portrayed by the mainstream news media as being a group of reckless gamblers. Traders were often viewed with skepticism for not approaching the markets in a more traditional buy-and-hold manner. Thinking back, I can't remember one interview where short-termers were asked if they also invested in longer-term holdings, yet most of the traders that I know do both.

Things have certainly changed. Former critics are now becoming aware that the only real difference between trading and investing is the time frame - the length of time the position is intended to be open. In retrospect, investors were the big gamblers, because they didn't understand market risk and how to effectively manage their stock positions. Major events that rocked the market during past years should have taught everyone that they should upgrade their investment strategy to include mutliple time frames and risk control, but in fact only a relative few have learned how to do that.

Think about it. The stock market bubble that burst soon after the Y2K (Year 2000) phenomenon. The market selloff after the terrorist attacks of September 11, 2001. The extended bear market that went on for several years, the Enron debacle and similar affairs, the burst of the housing bubble, the collapse of major financial institutions like AIG and the entire banking community. The US economy is now in one of the toughest periods since the great depression of 1929, despite the Fed pumping massive amounts of money into the system..

Look at everything the market has been through since the advent of the internet. Everyone, traditional investors too, should know that they absolutely must include a reliable risk control mechanism in their investment strategy. In reality, most investors don't have one.

If you know someone who invests but may not understand or use risk control, please give them a copy of this editorial. It could very well have a huge positive impact on their financial status in the days ahead.

Two Rules for Investors:

Rule Number One:

Make certain that you know exactly when and at what price you will get out of a stock or mutual fund before you get into it. If you find yourself in a tough situation because you didn't follow this rule, then it's time for a gut check. Take each of your holdings one at a time and ask yourself this question: "If I didn't already own this, would I buy it right now at this price?" If the answer is NO, then you should consider getting out of the position and putting the money to work into another stock or mutual fund that you WOULD buy right now.

Rule Number Two:

Never let a small, manageable loss turn into a large one. The typical gateway to violating this rule is to hold onto a losing position for too long.

Violations of the second rule almost always occur as a result of ignoring the first one. Both of these rules are very simple to follow; yet few people actually do it. Why? Because although most of us know what to do intellectually, we tend to let our emotions get in the way. This is why we all need at least one honest, experienced mentor.

If you're holding onto losing positions, call your broker and set up a meeting to talk about the Two Rules. Don't wait, do it right away. Making intelligent choices won't immediately restore previous losses, but it will stop them from getting worse AND prevent the situation from ever reoccurring.

With careful planning and sufficient risk control measures, the current market conditions are ideal for trading and investing. If you are new to the markets, or have been sitting on the sidelines waiting for your account to recover from previous investment methods, consider applying these two simple rules to protect your capital and accumulate profits at the same time.

Trade well,

- Thomas Sutton, Editor

                           "QUICK LIST"

Stock     08/09     08/09      Buy      Short   Trailing Stops     Gain 
Symbol    Price      +/-      Entry     Entry   Initial/Tighten   Amount 
------  --------  --------  --------  --------  ---------------  --------

BOOM      23.02      0.17      23.9     22.11         1.79/0.9      2.18
AMLX      25.50      0.68     26.51                  3.24/1.62         4
LUNG      20.51     -0.88               19.81        1.82/0.91      2.42
FORG      22.79      0.17      23.3                  1.82/0.91      2.42
LSPD      21.91     -1.47     23.11     20.79        2.32/1.16      2.64

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 In addition,always use the RightLine Risk Calculator before entering any position. For access to the Risk Calculator, go to

To learn more about controlling risk go to the RightLine Risk Control System at

For a glossary of terms unique to The RightLine Report go to:

Questions? Send us an email using our contact form at:
                           MARKET SUMMARY

US stocks were lower on Tuesday ahead of a deluge of inflation data due on Wednesday, which depending on the content could signal that the Fed Bank may continue to impliment an aggressive monetary policy. In equity headlines, Take-Two Interactive Software Inc. (TTWO $121) fell short of quarterly earnings predictions, Micron Technology (MU $59) released a warning concerning industry demand declines, while Novavax (NVAX $40) slashed its outlook. Mixed economic news included a modest improvement in small business optimism from multi-year lows, second quarter productivity declined, and unit labor costs remain seriously elevated. Treasuries, the USD/dollar and oil prices were lower, gold advanced higher.

                       Aug 8, 2022            Aug 9, 2022    
                  --------------------   --------------------
Dow                 32,832.54    29.07     32,774.41   -58.13
Nasdaq              12,644.46   -13.10     12,493.93  -150.53
S&P 500              4,140.06    -5.13      4,122.47   -17.59

NYSE Volume                      4.25B                  3.98B
NYSE Advancers                   2,152                  1,138
NYSE Decliners                   1,075                  2,071

Nasdaq Volume                     5.2B                  5.31B
Nasdaq Advancers                 2,896                  1,361
Nasdaq Decliners                 1,733                  3,286

                                 New Highs/Lows

                   08/02  08/03  08/04  08/05  08/08  08/09
NYSE New Highs        35     25     29     27     38     26
NYSE New Lows         32     36     37     46     18     58
Nasdaq New Highs      52     54     68     68    103     47
Nasdaq New Lows       95     57     51     66     36     96

                              TRADER'S TIP:  


Some people unknowingly take extreme risks by attempting to get rich too fast. Successful traders avoid greed and the damaging losses that accompany it. Use a trading method that is effective and protects your capital.
                         THE TECHNICAL ANALYST

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:
S&P 500 - 4122.47 August 9, 2022

52-Week High: 4818.62
52-Week Low: 3636.85
Daily Trend: UP
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 4306.58
Resistance 2: 4218.73
Resistance 1: 4181.96
Pivot: 4130.88
Support 1: 4094.11
Support 2: 4043.03
Support 3: 3955.18
NASDAQ Composite - 12493.93 August 9, 2022 52-Week High: 16212.23 52-Week Low: 10565.14 Daily Trend: UP Weekly trend: UP Weekly Pivot Levels Resistance 3: 13502.82 Resistance 2: 13027.11 Resistance 1: 12842.33 Pivot: 12551.40 Support 1: 12366.62 Support 2: 12075.69 Support 3: 11599.98
Dow Industrials - 32774.41 August 9, 2022 52-Week High: 36952.65 52-Week Low: 29653.27 Daily Trend: UP Weekly trend: UP Weekly Pivot Levels Resistance 3: 33890.69 Resistance 2: 33305.78 Resistance 1: 33054.62 Pivot: 32720.87 Support 1: 32469.71 Support 2: 32135.96 Support 3: 31551.05
************************** MARKET CALENDAR **************************
--ECONOMIC REPORTS AND EVENTS (all times are Eastern):
Wednesday, August 10, 2022:
10-Aug  8:30 am   Consumer price index
10-Aug  8:30 am   Core CPI
10-Aug  8:30 am   CPI (year-over-year)
10-Aug  8:30 am   Core CPI (year-over-year)
10-Aug  10 am   Wholesale inventories (revision)
10-Aug   2 pm   Federal budget (compared with year earlier)

Thursday, August 11, 2022:
11-Aug  8:30 am   Initial jobless claims
11-Aug  8:30 am   Continuing jobless claims
11-Aug  8:30 am   Producer price index

Friday, August 12, 2022:
12-Aug  8:30 am   Import price index
12-Aug  10 am   UMich consumer sentiment index (preliminary)
12-Aug  10 am   UMich 5-year inflation expectations (preliminary)

For a chart of typical Up or Down market reactions to specific major US economic reports, go to "Economic Indicator Effects" at this link:
                              TRADER'S TIP: 

TRADER'S TIP: "What is Money Management?"

In essence, Money Management is the part of your trading method that you use to decide how many shares to hold in a position. Money Management and Position Sizing are essentially the same thing.

                      STOCKS COVERED IN THIS ISSUE    


DMC Global Inc. (BOOM: Energy/Oil & Gas Equipment & Services) - 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 BOOM's case we will enter a BUY should it reach the 23.9 level, or a SELL short trade if it drops to 22.11. As usual a trailing stop is essential, 1.79 which should be tightened to 0.9 on a 2.18 gain. BOOM closed Tuesday at 23.02. Earnings Report Date: Oct 19, 2022. Beta: 1.56. Market-Cap: 449.537M. Optionable.


Amylyx Pharmaceuticals, Inc. (AMLX: Healthcare/Biotechnology) - 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. AMLX's current price action near moving average support signals a potential BUY entry at 26.51, followed by a 3.24 trailing stop which can be tightened to 1.62 upon earning 4. AMLX closed Tuesday at 25.50. Earnings Report Date: N/A. Beta: N/A. Market-Cap: 1.493B. Optionable.

Pulmonx Corporation (LUNG: Healthcare/Medical Devices) - BEARISH U-TURN. Stocks stuck in a downtrend like LUNG tend to bounce downhill rather than slide lower in a straight line. After interacting with a moving average resistance level on Tuesday, LUNG is poised to drop again. To take advantage of this setup, prepare to SELL shares short at 19.81. As usual, follow your entry with a trailing stop. A 1.82 stop will fit LUNG's current price range. Tighten it to 0.91 on a 2.42 gainer. Earnings Report Date: Oct 31, 2022. Beta: N/A. Market-Cap: 761.262M. Optionable.


ForgeRock, Inc. (FORG: Technology/Software-Infrastructure) - BULLISH BOUNCE. FORG has charted an upward weekly trend until recently when sellers showed up to push prices lower. On Tuesday the selling ran into solid support. A potential bounce up from this level should attract buyers and likely return FORG to the previously established uptrend. The Bullish Bounce set-up is the basis for our BUY entry, so be ready to go long on a rise to our trigger at 23.3. Set a trailing stop of 1.82, tightening to 0.91 on a 2.42 profit. FORG closed at 22.79 on Tuesday. Earnings Report Date: Aug 11, 2022. Beta: N/A. Market-Cap: 1.921B. Optionable.

Lightspeed Commerce Inc. (LSPD: Technology/Software-Application) - 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 LSPD. A move to the upside will trigger our BUY entry at 23.11, while a drop to 20.79 will trigger our SELL short entry. Follow your position with a 2.32 trailing stop. Tighten the stop to 1.16 once you have a 2.64 gain. LSPD closed Tuesday at 21.91. Earnings Report Date: Nov 02, 2022. Beta: 2.95. Market-Cap: 3.272B. 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.

Use "Gap Adjusted Entries" to reset the Entry Price for stocks that gap beyond recommended entry levels.

                           STOCK SPLIT SUMMARY

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:
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