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.
*********************************** "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 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/ ***************************** 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: *********************************** TRADER'S TIP: "I Want It ALL NOW!" 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: https://prorightline.com/index.php/technical-analyst-section-rightline-report/ 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 https://www.prorightline.com/rlch/080922SPX.jpg--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: https://prorightline.com/index.php/economic-indicator-effects/ *********************************** 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 *********************************** ENERGY SECTOR 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. HEALTHCARE SECTOR 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. TECHNOLOGY SECTOR 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. 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/ *********************************** 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: https://prorightline.com/index.php/trading-stock-splits-stages/ ====================================================================== Best of luck and have a Great Week! ********** If you prefer to receive this report in html with color and graphics, or have any questions, send us an email using our contact form at:https://prorightline.com/index.php/contact-us/ ====================================================================== DISCLAIMER The RightLine Report is an information service for investors and traders. It is not a solicitation nor a recommendation or offer to buy or sell securities. 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