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December 28, 2023 - The RightLine Report
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NOTES FROM THE EDITOR
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The dynamics of the market have undergone significant transformations over the past two decades. The conventional wisdom of "you can't time the market" has evolved in the contemporary era of online trading, acknowledging that timing plays a crucial role in the natural rhythm of trading.
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"QUICK LIST"
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Stock 12/28 12/28 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
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PLCE 23.45 -0.56 24.32 22.6 1.72/0.86 2.5
CBUS 20.12 -0.62 21.58 19.44 2.14/1.07 3.06
SYRE 20.50 0.29 20.99 19.69 1.3/0.65 6.36
SAVA 22.78 0.27 23.5 21.71 1.79/0.9 3.48
SAVA 22.78 0.27 23.5 21.71 1.79/0.9 3.48
RUN 20.32 0.00 20.85 19.42 1.43/0.72 2.18
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 showed little change on Thursday, with the S&P 500 poised to complete its ninth consecutive week of gains, closing just marginally below the all-time high set in January 2022. The real estate and utilities sectors were standout performers for the day, while the energy sector lagged. Throughout the month, sector leadership has been broad, with all 11 sectors of the S&P 500 posting positive returns, notably led by the real estate sector. Small-cap stocks took a slight step back, declining by roughly 0.4% today, although the Russell 2000 Index (a proxy for US small-cap stocks) has surged over 20% since October 31. Treasury yields concluded the day higher, with the 10-year settling around 3.84%. After a decline of over 2% Wednesday, oil prices closed lower again Thursday, finishing around $72 per barrel. In economic data, initial jobless claims for the week ending 12/13 edged higher, surpassing consensus expectations and exceeding the prior week's reading. Continuing jobless claims also saw a slight increase compared to the prior reading. Through 2023, initial jobless claims have averaged roughly 40% below the average since 1993. Continuing jobless claims have also been historically low in 2023 compared to the average since 1993. The robust labor market conditions this year have empowered consumers to continue spending despite elevated inflation and higher borrowing costs. Looking ahead to 2024, there is a possibility of economic growth slowing in the first half of the year from the above-trend growth observed in 2023. This could lead to a moderation in hiring and a potential easing in current labor-market conditions, although any easing is expected to be gradual rather than a sharp rise in unemployment. January has seen positive S&P 500 performance about 60% of the time, with an average return of 1.1%, while February has shown positive returns only 50% of the time. Over the long run, fundamental factors tend to drive market returns rather than the calendar. In that context, several fundamental aspects, such as potentially stronger corporate-earnings growth, a Fed pivot to interest-rate cuts, and ongoing moderation in inflation, could support market performance in the coming year. Dec 27, 2023 Dec 28, 2023
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Dow 37,656.52 111.19 37,710.10 53.58
Nasdaq 15,099.18 24.60 15,095.14 -4.04
S&P 500 4,781.58 6.83 4,783.35 1.77
NYSE Volume 2.75B 2.7B
NYSE Advancers 1,713 1,348
NYSE Decliners 1,108 1,486
Nasdaq Volume 7.49B 5.1B
Nasdaq Advancers 2,567 2,066
Nasdaq Decliners 1,750 2,220
New Highs/Lows
12/21 12/22 12/25 12/26 12/27 12/28
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NYSE New Highs 92 183 186 222 235 133
NYSE New Lows 20 10 11 3 4 7
Nasdaq New Highs 124 276 285 392 398 255
Nasdaq New Lows 87 83 81 65 80 60
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TRADER'S TIP:
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TRADER'S TIP: "Every Day Is A New Day" Traders should assume nothing about future market direction. Begin each day unbiased, and let the price action determine whether you're bullish or bearish. **************************
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 - 4783.35 December 28, 2023 52-Week High: 4793.30 52-Week Low: 3780.78 Daily Trend: UP Weekly trend: UP Weekly Pivot Levels Resistance 3: 3289.60 Resistance 2: 3225.01 Resistance 1: 1612.51 Pivot: 3160.43 Support 1: 1547.92 Support 2: 3095.84 Support 3: 3031.25 https://www.prorightline.com/rlch/122823SPX.jpg--ECONOMIC REPORTS AND EVENTS (all times are Eastern): FRIDAY, DEC. 29 9:45 am Chicago Business Barometer Dec. Bond market closes early 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: "S & R" The stock market is always influenced by "technical" features. Included in this group are certain price levels that traders call "Support and Resistance." In one sense they represent traffic cops that either repel price movement or allow it to proceed. If you're new to the markets, you might want to visit the "Education" section of our website at www.RightLine.net and review the articles on "Support & Resistance." Successful trading does require a basic understanding of these key terms. Fortunately it's not overly complicated. Note: Price action often moves through support and resistance levels intra-day, only to return within their boundaries before the closing bell. Take note that a closing price is usually much more significant than intra day moves. ***********************************
STOCKS COVERED IN THIS ISSUE
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CONSUMER CYCLICAL SECTOR The Children's Place, Inc. (PLCE: Consumer Cyclical/Apparel Retail) - SQUEEZE PLAY. In certain stocks a tightly constricted price range is a sign that neither bulls nor bears are confident of winning in the near term. This often means that the side that gives up first causes a quick move in the opposite direction. In these fear dominated skirmishes, opposing traders always benefit from the retreat. In the Squeeze Play setup you can actually play both sides of the inevitable surge. PLCE traders reached this state of stand-off on Thursday with the tightest range of the past seven days. You can take advantage of their efforts by placing a low risk BUY trigger at 24.32 and a SELL short trigger at 22.6. After one of the two orders is filled, cancel the un-triggered order and place a trailing stop at 1.72 which can be tightened to 0.86 on a 2.5 gain. PLCE closed Thursday at 23.45. Earnings Report Date: Mar 14, 2024. Beta: 2.12. Market-Cap: 292.593M. Optionable. HEALTHCARE SECTOR Cibus, Inc. (CBUS: Healthcare/Biotechnology) - SQUEEZE PLAY. CBUS is caught in a dilemma. The stock's compressed price range on Thursday 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. CBUS is now at 20.12. We can capture price action either way by placing a BUY trigger at 21.58 and a SELL short trigger at 19.44. Once CBUS 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 2.14. When you acquire a 3.06 profit, tighten the stop to 1.07. Earnings Report Date: Feb 29, 2024. Beta: 1.84. Market-Cap: 432.218M. Not Optionable. Spyre Therapeutics, Inc. (SYRE: Healthcare/Biotechnology) - 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 SYRE's case we will enter a BUY should it reach the 20.99 level, or a SELL short trade if it drops to 19.69. As usual a trailing stop is essential, 1.3 which should be tightened to 0.65 on a 6.36 gain. SYRE closed Thursday at 20.50. Earnings Report Date: Mar 04, 2024. Beta: 2.75. Market-Cap: 738.431M. Optionable. Cassava Sciences, Inc. (SAVA: Healthcare/Biotechnology) - SQUEEZE PLAY. Trader indecision has put SAVA squarely in the center of a Bull versus Bear standoff. This tight spot should soon give way to a clear winner in the short-term, and we want to be in position for the move. To do that we've set a BUY entry at 23.5 and a SELL short entry at 21.71. Now it's up to SAVA to show us which entry will be filled. Once the trade is underway place a 1.79 trailing stop, which can be tightened to 0.9 after you achieve a 3.48 profit. SAVA closed on Thursday at 22.78. Earnings Report Date: Feb 26, 2024. Beta: -0.02. Market-Cap: 960.726M. Optionable. Cassava Sciences, Inc. (SAVA: Healthcare/Biotechnology) - SQUEEZE PLAY. The struggle between buyers and sellers has resulted in SAVA's narrowest trading range of the past seven sessions. With neither group able to take complete control on Thursday, the stock's short term destiny is up for grabs. You can capitalize on this unusually tight condition by placing both a BUY order at 23.5 and a SELL order at 21.71. Regardless of which order is triggered, cancel the other one and follow your entry with a 1.79 trailing stop. Tighten the stop to 0.9 once you have a 3.48 gain. SAVA closed Thursday at 22.78. Earnings Report Date: Feb 26, 2024. Beta: -0.02. Market-Cap: 960.726M. Optionable. TECHNOLOGY SECTOR Sunrun Inc. (RUN: Technology/Solar) - 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 RUN. A move to the upside will trigger our BUY entry at 20.85, while a drop to 19.42 will trigger our SELL short entry. Follow your position with a 1.43 trailing stop. Tighten the stop to 0.72 once you have a 2.18 gain. RUN closed Thursday at 20.32. Earnings Report Date: Feb 20, 2024. Beta: 2.49. Market-Cap: 4.427B. 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
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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 ---------------- ------- -------- ------- ------ ------- 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. 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!
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