December 21, 2021 - The RightLine Report 

 
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                      NOTES FROM THE EDITOR
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Success in the market is all about timing. Pick the right entry and exit points, and you've scored a profitable trade. While this point is obvious to anyone who's even dabbled in stocks, it's easy to overlook an underlying factor that can increase the odds of having good timing: the natural rhythm of the market.

Recently our discussion centered on some elements of trading in the morning. There are certain tendencies that tend to repeat themselves from day to day, giving some order and predictability to a seemingly chaotic market.

The same holds true of afternoon trading, which begins with the "lunchtime lull." As the major institutional traders in New York take lunch at 12:00-2:00 EST, the broader market will typically see a volume pullback and a decline in volatility.

For us retail traders, this offers an excellent chance to take stock of what's happened so far (no pun intended). Make note of which potential set-ups have fallen by the wayside, and which have emerged as the strongest candidates for the second half of trading.

Occasionally the lunchtime lull will extend into the end of the session, producing a non-eventful afternoon. This is often the case on Fridays before long weekends or holidays. Typically, however, volatility will return during the final two hours. Oftentimes the action will be even more intense than the morning session.

For traders holding active positions, one of the most important tasks is to make a note of which companies have upcoming earnings announcements.

Tech companies typically report after the bell, while others will report the following morning. Holding a company's stock over its quarterly report can be a risky proposition. Use the final two hours to find an optimal exit point, being sure to close out the entire position before the closing bell sounds.

End-of-day volatility can be especially high on the last day of the quarter. Mutual funds making adjustments to their portfolios often wait until the last minute to buy or sell. The third Friday of every month, when stock options expire, is another session that tends to produce increased afternoon volatility.

The last two hours can offer up plenty of promising set-ups. But just as trading during the day's first 15-30 minutes can be a tricky proposition, the session's homestretch should also be left to experienced traders. Until you've developed a more advanced set of skills, use the final half hour to manage any active position, to start game-planning for the next day, or to simply relax!

Here's to Profits,

Kent Barton
Senior Analyst 


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                           "QUICK LIST"
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Stock     12/21     12/21      Buy      Short   Trailing Stops     Gain 
Symbol    Price      +/-      Entry     Entry   Initial/Tighten   Amount 
------  --------  --------  --------  --------  ---------------  --------
LWLG      17.46      0.64     18.11                  1.63/0.82       2.8
CUBI      60.14      2.81     61.22                      5/2.5      4.68
OPRT      20.66      0.38     21.45     20.03        1.42/0.71      2.44
EGP      216.01      0.08    221.05                 12.89/6.45      9.42
CRUS      89.68      0.94     91.69                  5.93/2.97      5.18


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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Stocks were higher on Tuesday as a dormant economic calendar and light news offered a calm mood to the market ahead of the upcoming Christmas Holiday weekend that starts on Friday. In the earnings department, the share price of Nike (NKE $167) rallied after the athletic shoe company posted strong quarterly profit results, while Micron Technology (MU $91) also rallied after announcing solid earnings and increased global demand for semiconductors. Oil prices moved higher, treasuries, the USD/dollar and gold all declined.


                       Dec 20, 2021           Dec 21, 2021   
                  --------------------   --------------------
Dow                 34,932.16  -433.28     35,492.70   560.54
Nasdaq              14,980.94  -188.74     15,341.09   360.14
S&P 500              4,568.02   -52.62      4,649.23    81.21

NYSE Volume                      4.74B                  4.16B
NYSE Advancers                     661                  2,749
NYSE Decliners                   2,723                    626

Nasdaq Volume                    4.63B                  4.57B
Nasdaq Advancers                 1,271                  3,458
Nasdaq Decliners                 3,404                  1,148

                                 New Highs/Lows

                   12/14  12/15  12/16  12/17  12/20  12/21
                 --------------------------------------------
NYSE New Highs        36     69    110     41     13     43
NYSE New Lows        176    230     97    162    241     61
Nasdaq New Highs      34     56     83     49     29     42
Nasdaq New Lows      478    641    218    438    423    168

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                              TRADER'S TIP:  
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TRADER'S TIP: "Practice vs. Prediction"

"There is a huge difference between trading correctly and making an accurate market prediction. In the final analysis, predicting the market is not what's important. What is important is using sound trading practices. And if sound trading habits are all that is important, there is no reason to try to predict the markets in the first place."

~ Charlie Wright, Veteran Trader and Hedge Fund Manager 

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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 - 4649.23 December 21, 2021

52-Week High: 4743.83
52-Week Low: 3662.71
Daily Trend: DOWN
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 4914.48
Resistance 2: 4782.71
Resistance 1: 4701.67
Pivot: 4650.95
Support 1: 4569.91
Support 2: 4519.18
Support 3: 4387.41
https://www.prorightline.com/rlch/122121SPX.jpg

NASDAQ Composite - 15341.09 December 21, 2021

52-Week High: 16212.23
52-Week Low: 12397.05
Daily Trend: DOWN
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 16609.08
Resistance 2: 15932.39
Resistance 1: 15551.03
Pivot: 15255.70
Support 1: 14874.34
Support 2: 14579.01
Support 3: 13902.32


Dow Industrials - 35492.70 December 21, 2021

52-Week High: 36565.73
52-Week Low: 29755.53
Daily Trend: DOWN
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 37424.31
Resistance 2: 36518.74
Resistance 1: 35942.09
Pivot: 35613.17
Support 1: 35036.52
Support 2: 34707.60
Support 3: 33802.03


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                             MARKET CALENDAR
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--ECONOMIC REPORTS AND EVENTS (all times are Eastern): 

Tuesday, December 21, 2021:
21-Dec  8:30 am   Current account deficit

Wednesday, December 22, 2021:
22-Dec  8:30 am   GDP revision (SAAR)
22-Dec  10 am   Consumer confidence index
22-Dec  10 am   Existing home sales (SAAR)

Thursday, December 23, 2021:
23-Dec  8:30 am   Initial jobless claims (regular state program)
23-Dec  8:30 am   Continuing jobless claims (regular state program)
23-Dec  8:30 am   Nominal personal income
23-Dec  8:30 am   Nominal consumer spending
23-Dec  8:30 am   Core inflation (monthly)
23-Dec  8:30 am   Core inflation (year-over-year)
23-Dec  8:30 am   Real disposable income
23-Dec  8:30 am   Real consumer spending
23-Dec  8:30 am   Durable goods orders
23-Dec  8:30 am   Core capital goods orders
23-Dec  10 am   New home sales (SAAR)
23-Dec  10 am   UMich consumer sentiment index (final)
23-Dec  10 am   Five-year inflation expectations (final)

Friday, December 24, 2021:
24-Dec          Christmas holiday: None scheduled

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: "Short-term Trading = Long Term Results"

Occasionally we hear from traders who are frustrated and can't seem to do anything right. They usually haven't made money for a while and are starting to feel as if they never will.

The problem could be thinking short-term -- not about their trades but about their results. Even if your trades last only minutes or hours, you have to think about your results over the long term.

The laws of probabilities allow for losing streaks which can sometimes run longer than you think is possible. Realize that when you have a run of losers, it doesn't necessarily reflect your skill as a trader.

Every trader - no matter how good - has some periods of time when they do poorly. The most important thing you can do is to keep working at it day after day. When combined with Risk Management, persistence and hard work lead to good results. 


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                      STOCKS COVERED IN THIS ISSUE    
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BASIC MATERIALS SECTOR

Lightwave Logic, Inc. (LWLG: Basic Materials/Specialty Chemicals) - NEW HIGH DIP. LWLG's upward price momentum produced a brand new 52-week high just a few sessions ago. Shares have been sliding downhill since reaching that point, but the bounce that took place during Tuesday's trading could be telling us the short-term decline is over. We need to confirm that sellers are exiting, so we'll wait for LWLG to move a bit higher before buying this stock. Set your BUY trigger at 18.11, and then enter a trailing stop of 1.63. Tighten the stop to 0.82 when you accumulate a 2.8-point gain. LWLG finished the Tuesday session at 17.46. Earnings Report Date: N/A. Beta: 1.38. Market-Cap: 1.888B. Optionable.

FINANCIAL SERVICES SECTOR

Customers Bancorp, Inc. (CUBI: Financial Services/Banks-Regional) - NEW HIGH DIP. It's no secret that strong stocks tend to get even stronger. CUBI's recent 52-week high is a clear indication that the ongoing uptrend is still healthy, though traders have taken some profits off the table during the past few sessions. Tuesday's bounce from support confirms the stock's intention to move even higher. This New High Dip setup takes advantage of the tendency for strong stocks to bounce skyward after pulling back from new highs. Prepare to BUY shares in CUBI should price reach the 61.22 level. Enter a trailing stop of 5 as soon as your order is filled, then tighten the stop to 2.5 on a 4.68 gain. Earnings Report Date: Jan 25, 2022. Beta: 1.60. Market-Cap: 1.949B. Not Optionable.

Oportun Financial Corporation (OPRT: Financial Services/Credit Services) - SQUEEZE PLAY. OPRT is caught in a dilemma. The stock's compressed price range on Tuesday has resulted in a condition comparable to a wound up rubber band. We anticipate that this undecided equity will take off soon, but with the direction still in question we'll let upcoming market action tell us whether to buy shares or sell short. OPRT is now at 20.66. We can capture price action either way by placing a BUY trigger at 21.45 and a SELL short trigger at 20.03. Once OPRT reveals its direction, enter your triggered order and disregard the other one. As soon as your position is in place, follow up with a trailing stop of 1.42. When you acquire a 2.44 profit, tighten the stop to 0.71. Earnings Report Date: Feb 16, 2022. Beta: 1.29. Market-Cap: 586.814M. Not Optionable.

REAL ESTATE SECTOR

EastGroup Properties, Inc. (EGP: Real Estate/REIT-Industrial) - BULLISH BOUNCE. If you are looking for another bouncer with profits in mind, EGP fits the bill. Shares have been in retreat-mode lately, but now this stock is in the process of bouncing from support. Currently priced at 216.01, plan to buy shares at 221.05 and use a 12.89 trailing stop. Tighten the stop to 6.45 on a 9.42 gain. Earnings Report Date: Feb 07, 2022. Beta: 0.79. Market-Cap: 8.788B. Optionable.

TECHNOLOGY SECTOR

Cirrus Logic, Inc. (CRUS: Technology/Semiconductors) - BULLISH BOUNCE. Up-trending stocks like CRUS have a tendency to bounce their way skyward rather than travel higher in a straight line. After touching down to a moving average support level on Tuesday, CRUS is poised to lift off again. To take advantage of this setup, prepare to BUY shares at 91.69 if positive price action occurs. As always, follow your entry with a trailing stop. A 5.93 trailer should work well with CRUS. Tighten it to 2.97 on a 5.18 gainer. Earnings Report Date: Jan 31, 2022. Beta: 0.84. Market-Cap: 5.124B. 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  
---------------- -------     --------    -------     ------  -------   
Arista Networks   ANET      11/1/2021   11/18/2021  4-for-1   Yes
ePlus             PLUS      11/9/2021   12/14/2021  2-for-1   Yes
NAPCO Security    NSSC      12/8/2021   1/5/2022    2-for-1   Yes 
Merchants Bancorp MBIN      11/17/2021  1/18/2022   2-for-1   No

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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