December 27, 2022 - The RightLine Report 

 
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                      NOTES FROM THE EDITOR
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Help Yourself ...

Search for "self-help" online and you'll be indundated with related resources. The basic idea behind this genre is that with attitude and lifestyle changes, you can improve your life. A common theme is how to cope with failure and bounce back from setbacks.

Coping with success is something that gets far less attention in self-help books, and from society in general. This seems to stem from the belief that if you meet with success, you don't need any more improvement. Adjusting to success is something that gets even less attention in the trading world. It's a common assumption that profitable traders don't need to change. "If it ain't broke, don't fix it." Well, in some ways that couldn't be further from the truth!

In a trading world where the only constant is change, what worked one day may not necessarily work the next. Profitable strategies must be adapted or even abandoned as the market dynamics change. For example, a strategy based on buying oil stocks on trendline rebounds would have worked spectacularly well in recent years. Over the past month this winning strategy finally began to fail.

While nobody has a crystal ball, underlying market forces rarely shift on a dime. Plenty of warning signs are usually given before a fundamental change occurs. By taking heed of these signs, profitable traders can adapt to the changes and profit from them.

The definition of success also changes with time. As you become a better trader, what was once an ideal goal for weekly profits might be easily achieved. Raising those goals gradually over time will reward strategies that work, leading to a growing trading account.

A growing account can also open the door to different strategies. Traders initially scoring profits with conservative set-ups can target entries in stocks that are more volatile movers. Similarly, a larger account allows for multiple trades and diversification of sectors.

Success brings its own potential pitfalls as well. The illusion of invulnerability can creep in, with devastating results. Countless traders have been washed out of the market after giving up previous profits. Maintaining solid risk management is one of the key factors behind nearly every trader's long-term success. In fact, it probably helped them get there in the first place!

Here's to profits,

Kent Barton
Senior Analyst 

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                           "QUICK LIST"
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Stock     12/27     12/27      Buy      Short   Trailing Stops     Gain 
Symbol    Price      +/-      Entry     Entry   Initial/Tighten   Amount 
------  --------  --------  --------  --------  ---------------  --------

MLKN      21.26      0.13     21.78     20.31        1.47/0.74      1.66
CAL       21.74     -0.02     22.21      20.7        1.51/0.76      2.18
PAC      152.04     -3.03              147.43        9.56/4.78     10.06
PRO       22.95     -0.46     23.71     22.21         1.5/0.75      2.16
SPB       60.14      0.88     61.07                  4.21/2.11      5.36


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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US stocks were mixed on Tuesday following the release of a truckload of economic data that included a decrease in home prices on a seasonally adjusted basis, a narrower than expected trade deficit, an increase in wholesale inventories, and contracting manufacturing activity in the Dallas region. On the equities front, shares of Southwest Airlines (LUV $34) fell after the US Department of Transportation announced that it would examine the company's mass flight delays and cancellations. Tesla's (TSLA $109) shares also dropped after the company said it plans on running a reduced production schedule at its factory in Shanghai China. Gold and treasury yields were higher, the USD/dollar closed lower, oil prices were mixed.


                       Dec 26, 2022           Dec 27, 2022   
                  --------------------   --------------------
Dow                 33,203.93   176.44        Closed        0
Nasdaq              10,497.86    21.74        Closed        0
S&P 500              3,844.82        0        Closed   -15.57

NYSE Volume                                             3.04B
NYSE Advancers                                          1,410
NYSE Decliners                                          1,768

Nasdaq Volume                        0                  3.84B
Nasdaq Advancers                                        1,591
Nasdaq Decliners                     0                  3,072

                                 New Highs/Lows

                   12/20  12/21  12/22  12/23  12/26  12/27
                 --------------------------------------------
NYSE New Highs        48     52     47     52            65
NYSE New Lows        164     73    201     82           137
Nasdaq New Highs      86     83     96     71      0    103
Nasdaq New Lows      467    316    483    274      0    536

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                              TRADER'S TIP:  
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TRADER'S TIP: "When Your Indicators Contradict The Trend"

Due to their overly sensitive nature, some technical indicators will turn in one direction while the price trend remains in the other. A rule of thumb - whenever a price trend and indicators are in conflict, always go with price until the trend is broken. 
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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 - 3829.25 December 27, 2022

52-Week High: 4818.62
52-Week Low: 3491.58
Daily Trend: DOWN
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 4083.70
Resistance 2: 3958.37
Resistance 1: 3901.59
Pivot: 3833.04
Support 1: 3776.26
Support 2: 3707.71
Support 3: 3582.38
https://www.prorightline.com/rlch/122722SPX.jpg

NASDAQ Composite - 10353.23 December 27, 2022

52-Week High: 15901.47
52-Week Low: 10088.83
Daily Trend: DOWN
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 11402.08
Resistance 2: 10961.83
Resistance 1: 10729.84
Pivot: 10521.58
Support 1: 10289.59
Support 2: 10081.33
Support 3: 9641.08


Dow Industrials - 33241.56 December 27, 2022

52-Week High: 36952.65
52-Week Low: 28660.94
Daily Trend: UP
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 34800.55
Resistance 2: 33936.14
Resistance 1: 33570.03
Pivot: 33071.73
Support 1: 32705.62
Support 2: 32207.32
Support 3: 31342.91


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                             MARKET CALENDAR
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--ECONOMIC REPORTS AND EVENTS (all times are Eastern): 
Monday, December 26, 2022:
26-Dec          Christmas holiday. None scheduled.

Tuesday, December 27, 2022:
27-Dec  8:30 am   Trade in goods, advance report
27-Dec   9 am   
27-Dec   9 am   FHFA U.S. home price index (SAAR)

Wednesday, December 28, 2022:
28-Dec  10 am   Pending home sales index

Thursday, December 29, 2022:
29-Dec  8:30 am   Initial jobless claims
29-Dec  8:30 am   Continuing jobless claims

Friday, December 30, 2022:
30-Dec  9:45 am   Chicago PMI

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: "Stock Too Expensive?"

Sometimes traders are hesitant to buy a stock in the $75 to $150 range because it is priced "too high." Actually that price range holds no greater risk than a lower priced stock - if you just enter smaller positions. To do this properly, be sure to use the RightLine Risk Control Calculator 100% of the time. It converts every position to a "low risk" trade, and allows you to take advantage of the more rapid price movement that more expensive stocks often enjoy. You can access it at http://www.rightline.net/rcc/index.html using your email address and password. 

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                      STOCKS COVERED IN THIS ISSUE    
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CONSUMER CYCLICAL SECTOR

MillerKnoll, Inc. (MLKN: Consumer Cyclical/Furnishings, Fixtures & Appliances) - SQUEEZE PLAY. Tuesday's trading action forced MLKN's daily price range into an abnormally narrow state. This translates into opportunity; for the cyclical nature of price volatility is to shrink extensively, then swell rapidly as shares move in one direction or another. Instead of trying to predict the direction MLKN will take when price volatility begins to increase, we'll set both a BUY (long) and a SELL (short) trigger to get us into the right trade. Be ready to BUY shares at 21.78 if MLKN moves higher, and place your order to SELL short at 20.31 if price declines to that level. As usual follow your entry with a trailing stop, 1.47 should be sufficient. Reduce your stop to 0.74 on a 1.66 gain. MLKN closed Tuesday at 21.26. Earnings Report Date: Mar 27, 2023. Beta: 1.50. Market-Cap: 1.606B. Optionable.

Caleres, Inc. (CAL: Consumer Cyclical/Footwear & Accessories) - SQUEEZE PLAY. CAL 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. CAL is now at 21.74. We can capture price action either way by placing a BUY trigger at 22.21 and a SELL short trigger at 20.7. Once CAL 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 1.51. When you acquire a 2.18 profit, tighten the stop to 0.76. Earnings Report Date: Mar 13, 2023. Beta: 1.69. Market-Cap: 774.292M. Optionable.

INDUSTRIALS SECTOR

Grupo Aeroportuario del Pac (PAC: Industrials/Airports & Air Services) - BEARISH U-TURN. Stocks stuck in a downtrend like PAC tend to bounce downhill rather than slide lower in a straight line. After interacting with a moving average resistance level on Tuesday, PAC is poised to drop again. To take advantage of this setup, prepare to SELL shares short at 147.43. As usual, follow your entry with a trailing stop. A 9.56 stop will fit PAC's current price range. Tighten it to 4.78 on a 10.06 gainer. Earnings Report Date: N/A. Beta: 0.81. Market-Cap: 7.682B. Not Optionable.

TECHNOLOGY SECTOR

PROS Holdings, Inc. (PRO: 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 PRO. A move to the upside will trigger our BUY entry at 23.71, while a drop to 22.21 will trigger our SELL short entry. Follow your position with a 1.5 trailing stop. Tighten the stop to 0.75 once you have a 2.16 gain. PRO closed Tuesday at 22.95. Earnings Report Date: Feb 08, 2023. Beta: 1.13. Market-Cap: 1.04B. Optionable.

N/A SECTOR

South Pacific Resources Ltd (SPB: N/A/N/A) - BULLISH BOUNCE. Another bullish bouncer, SPB appears ready to resume trading in an uptrend after recent selling forced the stock lower for several days. Tuesday's positive price action near Moving Average support says it's time to BUY shares if SPB reaches our entry trigger set at 61.07. Also place a 4.21 trailing stop which can be narrowed to 2.11 when you reach a 5.36 profit. SPB closed Tuesday at 60.14. Earnings Report Date: Feb 02, 2023. Beta: N/A. Market-Cap: 2.453B. 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  
---------------- -------     --------    -------     ------  -------   
Copart            CPRT       11/4/2022 11/4/2022     2-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/ 
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Best of luck and have a Great Week!
 
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