December 29, 2022 - The RightLine Report ********************************** NOTES FROM THE EDITOR **********************************
Success in the market rarely comes from some innate sense of where stocks are headed. While a "seat-of-your pants" approach might work temporarily, growing an account over the long run requires a consistent approach that incorporates some basic trading rules.
*********************************** "QUICK LIST" *********************************** Stock 12/30 12/30 Buy Short Trailing Stops Gain Symbol Price +/- Entry Entry Initial/Tighten Amount ------ -------- -------- -------- -------- --------------- -------- VTRU 22.40 0.38 22.69 20.9 1.79/0.9 2.78 ISEE 20.95 -0.08 21.79 20.28 1.51/0.76 2.24 POWL 35.20 0.90 36.16 3.5/1.75 3.1 ESAB 48.39 0.59 49.37 2.97/1.49 2.62 AEHR 20.63 0.72 21.08 19.41 1.67/0.84 4.18 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/ ***************************** MARKET SUMMARY ***************************** Stocks were solidly higher on Thursday, as light trading volume in the final sessions of 2022 reveals that a signficant number of professional traders and market makers will remain on holiday vacation until the 2023 New Year gets underway. The economic calendar offered fresh labor info, with unemployment claims moving slightly higher than the previous week. Light equities news headlined Cal-Maine Foods (CALM $53), whose stock price dropped after the company fell short of quarterly earnings projections. Gold moved higher, oil prices and the USD/dollar were lower, treasury yields finished the day mixed. Dec 28, 2022 Dec 29, 2022 -------------------- -------------------- Dow 32,875.71 -365.85 33,220.80 345.09 Nasdaq 10,213.29 -139.94 10,478.09 264.80 S&P 500 3,783.22 -46.03 3,849.28 66.06 NYSE Volume 3.1B 3.01B NYSE Advancers 718 2,629 NYSE Decliners 2,455 525 Nasdaq Volume 3.86B 4.17B Nasdaq Advancers 1,546 3,740 Nasdaq Decliners 3,042 868 New Highs/Lows 12/22 12/23 12/26 12/27 12/28 12/29 -------------------------------------------- NYSE New Highs 47 52 65 62 56 NYSE New Lows 201 82 137 180 84 Nasdaq New Highs 96 71 0 103 99 89 Nasdaq New Lows 483 274 0 536 504 209 *********************************** TRADER'S TIP: *********************************** TRADER'S TIP: "What If I Had A Crystal Ball?" You don't need a crystal ball if you prepare for each trade with the "what if" approach. Always remember to ask these questions before entering any position - "What will I do if price moves in my favor?" And "What will I do if price moves against me?" Most traders and investors never consider these questions at all, so simply writing down specific answers will put you way ahead of the game. ************************** 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 - 3849.28 December 29, 2022 52-Week High: 4818.62 52-Week Low: 3491.58 Daily Trend: DOWN Weekly trend: UP Weekly Pivot Levels Resistance 3: 2701.14 Resistance 2: 2623.73 Resistance 1: 1311.86 Pivot: 2546.32 Support 1: 1234.45 Support 2: 2468.91 Support 3: 2391.50 https://www.prorightline.com/rlch/122922SPX.jpg--ECONOMIC REPORTS AND EVENTS (all times are Eastern): Sunday, January 02, 2022: 26-Dec Christmas holiday. None scheduled. Monday, January 03, 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) Tuesday, January 04, 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/ *********************************** TRADER'S TIP: *********************************** TRADER'S TIP: "When Volatility Steps Up On Fed Day" When volatility steps up, it may be time for some traders to sit down. During times of wild and erratic trading, don't be afraid to let things settle down before attempting to take advantage of the situation. Often times, new traders get caught up in the euphoria of rapidly changing prices, but then get stung on poor fills, slow fills, market manipulation, and the likes. Unless you've got the experience and tools to successfully trade during "crunch" times, it may be best to just sit and watch. A good example of this type of trading situation arrives with each Fed interest rate announcement, after which, the pits tend to go wild for a time before traders and investors settle down to more orderly trading. *********************************** STOCKS COVERED IN THIS ISSUE *********************************** CONSUMER DEFENSIVE SECTOR Vitru Limited (VTRU: Consumer Defensive/Education & Training Services) - SQUEEZE PLAY. The struggle between buyers and sellers has resulted in VTRU'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 22.69 and a SELL order at 20.9. 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 2.78 gain. VTRU closed Thursday at 22.40. Earnings Report Date: Mar 08, 2023. Beta: -0.14. Market-Cap: 749.757M. Not Optionable. HEALTHCARE SECTOR IVERIC bio, Inc. (ISEE: Healthcare/Biotechnology) - SQUEEZE PLAY. Trader indecision has put ISEE 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 21.79 and a SELL short entry at 20.28. Now it's up to ISEE to show us which entry will be filled. Once the trade is underway place a 1.51 trailing stop, which can be tightened to 0.76 after you achieve a 2.24 profit. ISEE closed on Thursday at 20.95. Earnings Report Date: Feb 22, 2023. Beta: 1.02. Market-Cap: 2.809B. Optionable. INDUSTRIALS SECTOR Powell Industries, Inc. (POWL: Industrials/Electrical Equipment & Parts) - BULLISH BOUNCE. POWL's positive weekly uptrend is still intact despite recent selling that has driven share prices lower. Price action on Thursday shows that traders are aware of the moving average support zone now in play, and they are ready to consider buying again. A shift up from this point will attract even more buyers. The new buying should move POWL back in step with the bullish weekly trend, so our BUY entry trigger is set at 36.16. Once you hold a position, trail a stop of 3.5. Tighten it to 1.75 on a 3.1 gain. POWL closed at 35.20 on Thursday. Earnings Report Date: Feb 06, 2023. Beta: 1.19. Market-Cap: 416.117M. Optionable. ESAB Corporation (ESAB: Industrials/Metal Fabrication) - BULLISH BOUNCE. The charts for ESAB show that despite the downward pressure from sellers recently, the weekly uptrend is still going strong. Buyers showed up again on Thursday, resulting in the early stages of a rebound that started near moving average support. The resulting Bullish Bounce set-up offers a potential entry point for a long play. Set your trigger to BUY shares at 49.37, and follow your entry with a trailing stop of 2.97. Tighten it to 1.49 when a 2.62 profit is reached. ESAB ended the latest session at 48.39. Earnings Report Date: N/A. Beta: N/A. Market-Cap: 2.907B. Optionable. TECHNOLOGY SECTOR Aehr Test Systems (AEHR: Technology/Semiconductor Equipment & Materials) - 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 AEHR's case we will enter a BUY should it reach the 21.08 level, or a SELL short trade if it drops to 19.41. As usual a trailing stop is essential, 1.67 which should be tightened to 0.84 on a 4.18 gain. AEHR closed Thursday at 20.63. Earnings Report Date: Jan 05, 2023. Beta: 1.73. Market-Cap: 567.23M. 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 ---------------- ------- -------- ------- ------ ------- 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/ ====================================================================== 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. The information provided is obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. 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