December 30, 2021 - The RightLine Report
Notes From The Editor
The Market ... Up or Down?
Many traders and investors want market analysts to provide directional forecasts and lot's of opinionated market commentary to support their predictions. Experienced professional traders avoid this type of fortune telling. Pros know they are much better off letting the market decide whether they should go long or go short.
Setting up trades waiting to be triggered in both up and down markets is one way to do this. As a rule of thumb, if the market goes up the long trades are triggered and the shorts aren't. If the market goes down, the short trades are triggered and the longs aren't.
This "two-way" method contrasts sharply with the common investor routine of relying on predictions about what the market will do. More importantly, it is much more effective than the "one-way" method of putting all your eggs in the prediction basket.
We humans naturally want to know what the future holds. So much so that we will sometimes look for a person in "authority" to tell us what lies ahead.
When it comes to stocks, many are in the habit of asking someone to tell us what direction the market will go. I suggest we're better off looking for good trade setups in both directions and letting the market speak for itself.
Trade well,
Thomas Sutton, Editor
Stocks Covered Today Stock Splits
Quick List
Stock 12/30 12/30 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
------ -------- -------- -------- -------- --------------- --------
XPOF 20.33 0.18 21.04 19.39 1.65/0.83 3.58
PFE 58.41 0.82 59.51 3.72/1.86 4.52
ACAD 23.54 -0.42 24.52 22.8 1.72/0.86 2.5
KRON 14.30 0.17 14.87 13.58 1.29/0.65 2.14
RELY 20.70 0.26 21.19 19.46 1.73/0.87 3.44
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.
Stocks Covered Today Stock Splits
Market Summary
Stocks were slightly lower on Thursday, with the S&P 500 just short of a new record high for the 71st time in 2021. In the background, the market continues to deal with the Fed's recent decision to tighten its monetary campaign despite ongoing inflation pressure. Economic headlines featured a drop in new unemployment claims as continuing claims reached a post-pandemic low, and Chicago manufacturing activity accelerated more than predicted. In equities, Micron Technology (MU $94) share prices dipped after the company warned of production disruptions due to lockdowns in China, while Biogen (BIIB $240) shares also fell after Samsung denied reports that it was in talks to buy the drug manufacturer. Oil, the USD/dollar, treasuries and gold prices all advanced higher.
Dec 29, 2021 Dec 30, 2021
-------------------- --------------------
Dow 36,488.63 90.42 36,398.08 -90.55
Nasdaq 15,766.22 -15.51 15,741.56 -24.65
S&P 500 4,793.06 6.71 4,778.73 -14.33
NYSE Volume 3B 3.15B
NYSE Advancers 1,875 1,857
NYSE Decliners 1,481 1,490
Nasdaq Volume 3.71B 3.74B
Nasdaq Advancers 1,915 2,754
Nasdaq Decliners 2,727 1,904
New Highs/Lows
12/23 12/23 12/27 12/28 12/29 12/30
--------------------------------------------
NYSE New Highs 102 101 134 167 157 164
NYSE New Lows 28 28 43 62 89 55
Nasdaq New Highs 80 80 130 157 126 108
Nasdaq New Lows 122 121 198 319 447 179
Stocks Covered Today Stock Splits
TRADER'S TIP: "Try a Few Diamonds and Spiders!"
If you are new to shorting, a good place to start is with index "stocks" like QQQ (NASDAQ 100 Trust), DIA (Dow Diamonds), or SPY (Spiders). While they aren't actually "stocks," these popular instruments are widely traded in virtually the same fashion.
However, there is one distinct advantage. Unlike individual stocks, each index "stock" represents a broad list of securities. The DIA includes 30 stocks, the QQQ contains 100, and the SPY consists of 500. As a result, trading this type of index security lowers the risk associated with holding positions in specific companies.
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 - 4778.73 December 30, 2021
52-Week High: 4808.93
52-Week Low: 3662.71
Daily Trend: UP
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 5085.22
Resistance 2: 4875.55
Resistance 1: 4800.66
Pivot: 4665.88
Support 1: 4590.99
Support 2: 4456.21
Support 3: 4246.54
NASDAQ Composite - 15741.56 December 30, 2021
52-Week High: 16212.23
52-Week Low: 12397.05
Daily Trend: UP
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 17079.67
Resistance 2: 16241.73
Resistance 1: 15947.54
Pivot: 15403.79
Support 1: 15109.60
Support 2: 14565.85
Support 3: 13727.91
Dow Industrials - 36398.08 December 30, 2021
52-Week High: 36679.44
52-Week Low: 29856.30
Daily Trend: UP
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 38349.99
Resistance 2: 36954.50
Resistance 1: 36452.53
Pivot: 35559.01
Support 1: 35057.04
Support 2: 34163.53
Support 3: 32768.04
Stocks Covered Today Stock Splits
Market Calendar
ECONOMIC REPORTS AND EVENTS (all times are Eastern): Thursday, December 30, 2021: 30-Dec 8:30 am Initial jobless claims (regular state program) 30-Dec 8:30 am Continuing jobless claims (regular state program) 30-Dec 9:45 am Chicago PMI Friday, December 31, 2021: 31-Dec None scheduled For a chart of typical Up or Down market reactions to specific major US economic reports go to: Economic Indicator Effects
Stocks Covered Today Stock Splits
TRADER'S TIP: "Hurry, Hurry, Step Right Up!"
Don't pay much attention to all the hype from brokerage analysts or the business media. Brokerage firms usually have more than just a casual interest in stocks they tout, and many times so does the media.
Stocks Covered in This Issue
CONSUMER CYCLICAL SECTOR
Xponential Fitness, Inc. (XPOF: Consumer Cyclical/Leisure) - SQUEEZE PLAY. XPOF shareholders know what it feels like to be squeezed. Thursday's slim price range reveals uncertainty on both sides of the table, a situation which often resolves itself by either Bears or Bulls quickly gaining a clear advantage. The question is "who will win?" Near-term market action tell us whether we should sell short or we should buy shares instead. XPOF closed Thursday at 20.33. The plan is to enter in the right direction by placing a BUY trigger at 21.04 and a SELL short trigger at 19.39. Once XPOF establishes direction, place your triggered order. As soon as you are in the trade, place a trailing stop in the amount of 1.65. After you've collected a 3.58 profit, tighten the stop to 0.83. Earnings Report Date: N/A. Beta: N/A. Market-Cap: 485.846M. Optionable.
HEALTHCARE SECTOR
Pfizer Inc. (PFE: Healthcare/Drug Manufacturers-General) - 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 PFE which met our setup criteria on Thursday. The BUY trigger for this trade is at 59.51, and the trailing stop is sized at 3.72. Resize the stop to 1.86 upon collecting a 4.52 point gain. PFE closed Thursday at 58.41. Earnings Report Date: Feb 08, 2022. Beta: 0.62. Market-Cap: 327.848B. Optionable.
ACADIA Pharmaceuticals Inc. (ACAD: Healthcare/Biotechnology) - SQUEEZE PLAY. Thursday's trading session left ACAD 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 24.52 and your SELL short trigger at 22.8. One of the orders will be triggered by upcoming price action. When your market order is filled, cancel the remaining trigger and enter a 1.72 trailing stop. Once you have a 2.5 profit, reduce the stop to 0.86. Earnings Report Date: Feb 22, 2022. Beta: 0.57. Market-Cap: 3.784B. Optionable.
Kronos Bio, Inc. (KRON: Healthcare/Biotechnology) - SQUEEZE PLAY. KRON 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 14.87 and a SELL short entry at 13.58. Once your trade is filled, enter a 1.29 trailing stop. Tighten it to 0.65 after a 2.14 gain. KRON closed on Thursday at 14.30. Earnings Report Date: Mar 21, 2022. Beta: N/A. Market-Cap: 805.766M. Optionable.
TECHNOLOGY SECTOR
Remitly Global, Inc. (RELY: Technology/Software-Infrastructure) - SQUEEZE PLAY. The ticker for Thursday's session shows RELY 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 21.19 and a SELL short trigger at 19.46. When RELY 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 1.73 trailing stop. Upon reaching a 3.44 profit, resize the stop to 0.87. Earnings Report Date: N/A. Beta: N/A. Market-Cap: 3.397B. 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.
Stocks Covered Today Stock Splits
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
---------------- ------- -------- ------- ------ -------
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
AeroCentury Corp ACY 12/17/2021 1/10/2021 5-for-1 No
Merchants Bancorp MBIN 11/17/2021 1/18/2022 2-for-1 No
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