Notes From The Editor

One of the best aspects about being a market participant is that, for the most part, you make the rules. Trading can be geared to suit your own individual tastes in terms of risk-taking, goals, and timeframe. You make the call.

Timeframe is one of the factors that need to be nailed down before a successful trading strategy can be implemented. Without a clear idea of how long you plan to hold a trade, it becomes more difficult to develop a consistent approach.

There is no set definition of the various timeframes, but in general they are as follows:

Daytrading: Multiple trades per day, with a typical hold of hours, minutes, or even seconds (in the case of scalpers).

Swing Trading: Multiple trades per week, with a typical hold of 3-10 days. Occasionally extends up to 3 weeks or longer.

Intermediate-Term: A typical hold of 2 weeks to 3 months.

Long-term: A typical hold of at least three months.

So which one is right for you? Unless you're a dedicated hardcore trader who can spend hours in front of the computer, it's probably not daytrading. This is truly a "love it or leave it" approach - without intense study and dedication most daytraders either burn out or blow their accounts.

Swing Trading is far easier on the nerves. This is the approach utilized in most Rightline set-ups. We believe it represents the best of both worlds. Holding for several days gives time for trade set-ups to come to fruition, and offers more "wiggle-room" with wider stops.

On the other hand, swing trades also allow for more active trade management such as revising stops at the end of every trading day. This flexibility lends itself to a more pro-active strategy that can react to daily market changes.

A swing trade can turn into an intermediate-term trade when a stop level is not reached during the initial two weeks. This timeframe works well with slower moving stocks that display slow moving but reliable trends.

Long-term holds are self explanatory - but what is the difference between a long-term hold and an investment? The latter usually has no active trade management; a stock is held over several years with no stop and no clear profit-target. The long-term approach includes stop-losses and can react to changes in the market environment - for example when money is rotating from one sector to another.

Here's to profits,

Kent Barton
Senior Analyst

Quick List

    
Stock     12/12     12/12      Buy      Short   Trailing Stops     Gain 
Symbol    Price      +/-      Entry     Entry   Initial/Tighten   Amount 
------  --------  --------  --------  --------  ---------------  --------

RYZB      25.06      1.43     26.02                  3.57/1.79      3.34
XRAY      31.92      0.25     32.44                  2.07/1.04      1.56
XMTR      24.31     -0.37     25.03     23.28        1.75/0.88      2.88
SMTC      20.48     -0.14     20.99     19.61        1.38/0.69       1.4
AEHR      25.24     -0.52      26.1     23.77        2.33/1.17      2.78

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

Stocks ended the Tuesday session higher after the release of the November consumer price index (CPI) inflation report, aligning closely with expectations. Market leadership exhibited a broad spectrum, with growth sectors like information technology performing well alongside cyclical sectors such as materials and financials. However, the energy sector notably underperformed, declining over 1% on the day and over 12% in the past three months due to lower oil prices. Treasury yields remained relatively steady, with the 10-year closing around 4.2% and the 2-year around 4.7%. Oracle shares faced a significant drop of over 12% following its earnings report, with market focus shifting to slower-than-expected cloud-services growth. Oil prices closed notably lower, falling below $69 per barrel and experiencing a decline of over 20% in the past three months.

The November inflation report reflected figures largely in line with expectations. Headline CPI inflation dipped to 3.1% year-over-year, slightly below the prior reading of 3.2% and the lowest increase since June. Core CPI, excluding food and energy, held steady at 4% year-over-year, aligning with consensus expectations. On a month-over-month basis, core CPI edged up to 0.3%, compared to the prior month's 0.2%. The index for shelter was a significant contributor to the month-over-month rise, increasing by 0.4% and marking a 6.5% year-over-year increase. Despite a slow moderation in shelter prices, the year-over-year reading was the lowest since August 2022. Timely indicators of rents and home prices also showed declines from their 2022 peaks, indicating potential further moderation for shelter prices in the coming months. This inflation report is anticipated to support the Fed's decision to maintain policy rates at the upcoming FOMC meeting, with Chair Powell likely emphasizing the need for additional progress before declaring victory over inflation.

Market attention is now directed toward the upcoming FOMC meeting, where the Fed's interest-rate announcement and the final Summary of Economic Projections (SEP) for 2023 will be released. In the September projections, the median expectation for the fed funds rate at the end of 2024 was 5.1%, implying a 0.25% rate cut from the current rate. However, futures markets have priced in approximately 100 basis points (1%) of rate cuts in 2024, potentially starting as early as March.

While there's a credible case for the Fed to halt rate hikes, the prevailing view is that it will maintain current policy rates until later in 2024. Powell is expected to underscore that it would be premature to declare victory over inflation currently and reiterate the willingness to keep rates higher for an extended period to prevent financial conditions from getting ahead of anticipated easier monetary policy.

                        Dec 11, 2023           Dec 12, 2023   
                  --------------------   --------------------
Dow                 36,404.93   157.06     36,577.94   173.01
Nasdaq              14,432.49    28.51     14,533.40   100.91
S&P 500              4,622.44    18.07      4,643.70    21.26

NYSE Volume                        333                  3.89B
NYSE Advancers                     607                  1,303
NYSE Decliners                     429                  1,521

Nasdaq Volume                        0                  5.06B
Nasdaq Advancers                   737                  1,956
Nasdaq Decliners                   514                  2,444

                                 New Highs/Lows

                   12/05  12/06  12/07  12/08  12/11  12/12
                 --------------------------------------------
NYSE New Highs       103    136     62    101     44    144
NYSE New Lows         19     28     35     19     10     45
Nasdaq New Highs      89    137    101    145      0    218
Nasdaq New Lows       74    107    122    108      1    188
   

TRADER'S TIP: "Moving Average Rainbows"

Place a variety of moving averages on your chart, and watch how they crossover each other and fan out into a "rainbow." The patterns that are drawn as the trend unfolds will indicate the strength of a reversal. Try a 13, 22, and 50 period Exponential Moving Average first to see how it works. This combination has shown to be effective under a wide range of conditions. Take notice of any similarities in the rainbows that have occurred historically, with particular attention to the way the rainbow takes shape after bouncing from support or resistance. This is a helpful tool to avoid head fakes, and determine true trend reversals in almost any time frame.

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".

S&P 500 - 4643.70 December 12, 2023

52-Week High: 4643.93
52-Week Low: 3764.49
Daily Trend: UP
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 4712.15
Resistance 2: 4649.42
Resistance 1: 4626.89
Pivot: 4586.70
Support 1: 4564.17
Support 2: 4523.97
Support 3: 4461.24

NASDAQ Composite - 14533.40 December 12, 2023

52-Week High: 14533.40
52-Week Low: 10207.47
Daily Trend: UP
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 15009.93
Resistance 2: 14651.53
Resistance 1: 14527.75
Pivot: 14293.13
Support 1: 14169.35
Support 2: 13934.73
Support 3: 13576.33
        
Dow Industrials - 36577.94 December 12, 2023

52-Week High: 36596.11
52-Week Low: 31429.82
Daily Trend: UP
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 36755.67
Resistance 2: 36470.32
Resistance 1: 36359.09
Pivot: 36184.97
Support 1: 36073.74
Support 2: 35899.62
Support 3: 35614.27
 

Market Calendar

ECONOMIC REPORTS AND EVENTS (all times are Eastern):    

MONDAY, DEC. 11					
None scheduled
				
TUESDAY, DEC. 12					
8:30 am	Consumer price index	Nov.		
8:30 am	Core CPI	Nov.		
8:30 am	CPI year over year			
8:30 am	Core CPI year over year			
2:00 pm	Monthly U.S. federal budget	Nov.
		
WEDNESDAY, DEC. 13					
8:30 am	Producer price index	Nov.		
8"30 am	Core PPI	Nov.		
8:30 am	PPI year over year			
8:30 am	Core PPI year over year			
2:00 pm	FOMC interest-rate decision				
2:30 pm	Fed Chairman Jerome Powell press conference
				
THURSDAY, DEC. 14					
8:30 am	Initial jobless claims	Dec. 
8:30 am	Import price index	Nov.		
8:30 am	Import price index minus fuel	Nov.	
8:30 am	U.S. retail sales	Nov.		
8:30 am	Retail sales minus autos	Nov.		
10:00 am	Business inventories	Nov.
		
FRIDAY, DEC. 15					
8:30 am	Empire State manufacturing survey	Dec.	
9:15 am	Industrial production	Nov.		
9:15 am	Capacity utilization	Nov.
		
For a chart of typical Up or Down market reactions to specific major US economic reports 
go to:  Economic Indicator Effects

TRADER'S TIP: "Charts Reveal Emotions"

A stock price chart is an expression of trader and investor emotions, with fear and greed at opposite poles. Fear is generally a much stronger emotion than greed, and the reason that markets tend to go down faster than they go up.

Stocks Covered in This Issue

HEALTHCARE SECTOR

RayzeBio, Inc. (RYZB: 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 RYZB which met our setup criteria on Tuesday. The BUY trigger for this trade is at 26.02, and the trailing stop is sized at 3.57. Resize the stop to 1.79 upon collecting a 3.34 point gain. RYZB closed Tuesday at 25.06. Earnings Report Date: N/A. Beta: N/A. Market-Cap: 1.502B. Optionable.

DENTSPLY SIRONA Inc. (XRAY: Healthcare/Medical Instruments & Supplies) - 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. XRAY's behavior on Tuesday could very well be a sign that a new bounce is underway. Place a BUY trigger at 32.44. In the event your trigger is met, also place a 2.07 trailing stop which can be trimmed down to 1.04 when you have a 1.56 profit. XRAY closed Tuesday at 31.92. Earnings Report Date: Feb 26, 2024. Beta: 0.98. Market-Cap: 6.763B. Optionable.

INDUSTRIALS SECTOR

Xometry, Inc. (XMTR: Industrials/Specialty Industrial Machinery) - SQUEEZE PLAY. XMTR 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 25.03 and a SELL short entry at 23.28. Once your trade is filled, enter a 1.75 trailing stop. Tighten it to 0.88 after a 2.88 gain. XMTR closed on Tuesday at 24.31. Earnings Report Date: Feb 28, 2024. Beta: 0.77. Market-Cap: 1.169B. Optionable.

TECHNOLOGY SECTOR

Semtech Corporation (SMTC: Technology/Semiconductors) - SQUEEZE PLAY. The ticker for Tuesday's session shows SMTC is now stuck in a tight price band. With the cyclical contraction and expansion nature of volatility in force, we should see a new period of price expansion in the days ahead. To improve the odds of catching the next directional wave, place a BUY trigger at 20.99 and a SELL short trigger at 19.61. When SMTC starts moving out of its narrow range, your order will be triggered. Once you're in the trade, cancel the opposing trigger and set a 1.38 trailing stop. Upon reaching a 1.4 profit, resize the stop to 0.69. Earnings Report Date: N/A. Beta: 1.72. Market-Cap: 1.317B. Optionable.

Aehr Test Systems (AEHR: Technology/Semiconductor Equipment & Materials) - SQUEEZE PLAY. Tuesday's trading session left AEHR in a very narrow price range after buyers and sellers fought to a near stalemate. Both sides are looking for some traction, and a breakout either way could provide a nice gain in the short term. To get aboard, set your BUY trigger at 26.1 and your SELL short trigger at 23.77. One of the orders will be triggered by upcoming price action. When your market order is filled, cancel the remaining trigger and enter a 2.33 trailing stop. Once you have a 2.78 profit, reduce the stop to 1.17. Earnings Report Date: Jan 03, 2024. Beta: 1.99. Market-Cap: 726.894M. 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

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. The information provided is obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. The publishers of The RightLine Report are not brokers or financial advisors, and are not acting in any way to influence the purchase or sale of any security. Stock picks, entry points and exit points should be considered an information resource to assist the trader in developing a trading plan and it is the sole responsibility of the reader to conduct his or her own due diligence before executing a trade. Trading securities should be considered speculative with a high degree of volatility and risk.

The publishers of The RightLine Report recommend that anyone trading securities should do so with caution, exercise prudent trading discipline and have a personal risk management strategy in place before doing so. It is possible at this or some subsequent date, the publishers and staff of The Pro Right Line Corp. may own, buy or sell securities presented. The Pro Right Line Corp. is not a financial advisory service. Its publishers, owners or investors, are not liable for any losses or damages, monetary or otherwise, that result from the content of The RightLine Report. Past RightLine Report performance may not be indicative of future performance.

All subscriptions and/or use of the RightLine.net website are subject to RightLine's "Terms of Use" and "Subscriber Terms & Conditions" which are posted at www.rightline.net.

Any REDISTRIBUTION of the above information, without The RightLine's written consent, is STRICTLY PROHIBITED.

Copyright / The Pro Right Line Corporation - All Rights Reserved

Click Here To Unsubscribe