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December 31, 2019 - The RightLine Report
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NOTES FROM THE EDITOR
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It's been said that for every expert there's an opinion, and for every opinion there's an expert. The perfect example of this observation arrives annually during the weeks surrounding the New Year. Without fail a never-ending lineup of TV talking heads will present a steady stream of authoritative market predictions. Not surprisingly, many of these experts offer opposing viewpoints and expectations for the next twelve months.
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"QUICK LIST"
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Stock 12/31 12/31 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
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FRG 23.20 0.45 23.52 21.86 1.66/0.83 3.70
REGI 26.95 0.20 27.51 25.70 1.81/0.91 1.98
AVRO 20.13 0.08 20.86 19.25 1.61/0.81 2.76
TWST 21.00 -0.07 21.43 20.13 1.30/0.65 2.74
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 www.rightline.net/education/using-quicklist.html. In addition,always use the RightLine Risk Calculator before entering any position. For access to the Risk Calculator, go to www.RightLine.net and login to the Member's area. To learn more about controlling risk go to the RightLine Risk Control System at http://www.rightline.net/education/riskcontrol.html For a glossary of terms unique to The RightLine Report go to: http://www.rightline.net/education/glossary.html Problems? If you have any difficulty viewing this report, the link below will take you to a page where you will find a list of items that may affect normal viewing within your email client. http://www.rightline.net/home/reportprob.html Questions? Send us an email using our contact form at: http://www.rightline.net/home/contact.html
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MARKET SUMMARY
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The major US stock market averages closed modestly higher on Tuesday, marking a positive end to a robust year that enjoyed quite a number of record highs. In equity news, shares of Core Laboratories NV (CLB $38) plummeted more than 20% after the oil industry services company cut its quarterly guidance and dividend plans, while Uber Technologies (UBER $30) announced it is suing the state of California over a new labor law. Trade volume was relatively low heading into the New Year's holiday break on Wednesday. Oil prices and the USD/dollar finished lower, gold and treasury yields were higher. Dec 30, 2019 Dec 31, 2019
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Dow 28,462 -183.12 28,538 +76.30
Nasdaq 8,945.99 -60.62 8,973 +26.61
S&P 500 3,221 -18.73 3,231 +9.49
NYSE Volume 3.08B 3.03B
NYSE Advancers 1263 1892
NYSE Decliners 1674 1033
Nasdaq Volume 2.07B 2.27B
Nasdaq Advancers 1260 2009
Nasdaq Decliners 1936 1220
New Highs/Lows
12/24 12/25 12/26 12/27 12/30 12/31
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NYSE New Highs 133 0 175 203 97 103
NYSE New Lows 5 0 7 4 15 9
Nasdaq New Highs 158 0 216 216 114 109
Nasdaq New Lows 33 0 27 29 37 29
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TRADER'S TIP:
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TRADER'S TIP: "Making Decisions Builds Confidence" Each time we enter or exit a trade we make a decision. Every decision we make causes us to grow - IF we give our experiences the value they deserve. However, if we short-change ourselves for not always making "perfect" choices and view our experiences as "mistakes" our confidence will go down instead of up. Just remember that trading conditions are rarely optimum, and we're always making decisions under less than ideal circumstances. Give yourself a break, knowing that only YOU can set the proper value for each experience you have. Be sure you make the right choice. Build your confidence and never value any trade or other experience as worthless. **************************
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: www.rightline.net/education/how_to_use_rlr_technical_analyst.html. S&P 500 - 3230.78 December 31, 2019
52-Week High: 3247.93
52-Week Low: 2443.96
Daily Trend: UP
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 3290.99
Resistance 2: 3263.57
Resistance 1: 3251.79
Pivot: 3236.15
Support 1: 3224.37
Support 2: 3208.73
Support 3: 3181.31
http://www.rightline.net/rlch/123119SPX.jpg
NASDAQ Composite - 8972.60 December 31, 2019
52-Week High: 9052.00
52-Week Low: 6457.13
Daily Trend: UP
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 9232.94
Resistance 2: 9115.30
Resistance 1: 9060.96
Pivot: 8997.66
Support 1: 8943.32
Support 2: 8880.02
Support 3: 8762.38
Dow Industrials - 28538.44 December 31, 2019
52-Week High: 28701.66
52-Week Low: 22638.41
Daily Trend: UP
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 29032.66
Resistance 2: 28822.78
Resistance 1: 28734.01
Pivot: 28612.90
Support 1: 28524.13
Support 2: 28403.01
Support 3: 28193.13
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MARKET CALENDAR
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--ECONOMIC REPORTS AND EVENTS (all times are Eastern):
Monday, December 30, 2019:
30-Dec 8:30 am Advance trade in goods
30-Dec 9:45 am Chicago PMI
30-Dec 10 am Pending home sales
Tuesday, December 31, 2019:
31-Dec 9 am Case-Shllier home price index
31-Dec 10 am Consumer confidence index
Wednesday, January 01, 2020:
None scheduled - Market Closed New Year's Day
Thursday, January 02, 2020:
02-Jan 8:30 am Weekly jobless claims
02-Jan 9:45 am Markit manufacturing PMI
Friday, January 03, 2020:
03-Jan 10 am ISM manufacturing index
03-Jan 10 am Construction spending
03-Jan Varies Motor vehicle sales
For a chart of typical Up or Down market reactions to specific major US economic reports, go to "Economic Indicator Effects" at this link: http://www.rightline.net/education/economic.html
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TRADER'S TIP:
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TRADER'S TIP: "Reverse Stock Splits" Although rare, every now and then you will see or hear of a reverse stock splits. Investors generally view this negatively, as it is often a ploy to prop up the share price. Only on occasion is it done for a positive reason. In other words....avoid! ***********************************
STOCKS COVERED IN THIS ISSUE
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CONSUMER CYCLICAL SECTOR Franchise Group, Inc. (FRG: Consumer Cyclical/Personal Services) - SQUEEZE PLAY. The ticker for Tuesday's session shows FRG 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 23.52 and a SELL short trigger at 21.86. When FRG 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 1.66 trailing stop. Upon reaching a 3.70 profit, resize the stop to 0.83. Earnings Report Date: N/A. Beta: 0.47. Market-Cap: 519M. Not Optionable. ENERGY SECTOR Renewable Energy Group, Inc. (REGI: Energy/Oil & Gas Refining & Marketing) - SQUEEZE PLAY. Tuesday's trading session left REGI 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 27.51 and your SELL short trigger at 25.70. One of the orders will be triggered by upcoming price action. When your market order is filled, cancel the remaining trigger and enter a 1.81 trailing stop. Once you have a 1.98 profit, reduce the stop to 0.91. Earnings Report Date: N/A. Beta: 1.23. Market-Cap: 1.1B. Optionable. HEALTHCARE SECTOR AVROBIO, Inc. (AVRO: Healthcare/Biotechnology) - SQUEEZE PLAY. Sometimes when Bulls and Bears face off in the market arena for a typical day-long battle, there is no clear winner. This is evident when the daily price range contracts to an unusually narrow state. AVRO found itself in this condition on Tuesday when neither buyers or sellers were able to push ahead. This setup provides traders a chance to hop on board the next breakout - whether it's to the upside or down - with little risk of loss. To do this place a BUY order at 20.86 and a SELL short trigger at 19.25. When AVRO moves outside of Tuesday's range, one of the orders will be filled. Once you hold a position of shares, cancel the unfilled order and place a 1.61 trailing stop. After you've got a 2.76 profit, tighten the stop to 0.81. AVRO closed at 20.13 on Tuesday. Earnings Report Date: Mar 23, 2020. Beta: N/A. Market-Cap: 637M. Optionable. Twist Bioscience Corporation (TWST: Healthcare/Diagnostics & Research) - SQUEEZE PLAY. TWST shareholders know what it feels like to be squeezed. Tuesday'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. TWST closed Tuesday at 21.00. The plan is to enter in the right direction by placing a BUY trigger at 21.43 and a SELL short trigger at 20.13. Once TWST establishes direction, place your triggered order. As soon as you are in the trade, place a trailing stop in the amount of 1.30. After you've collected a 2.74 profit, tighten the stop to 0.65. Earnings Report Date: N/A. Beta: N/A. Market-Cap: 695M. 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: http://www.rightline.net/education/riskcontrol.html Use "Gap Adjusted Entries" to reset the Entry Price for stocks that gap beyond recommended entry levels. Link: http://www.rightline.net/education/gap-adjusted.html ***********************************
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 ---------------- ------- -------- ------- ------ ------- Penns Woods Banc PWOD 09/03/2019 10/01/2019 3-for-2 No Equity Lifestyle ELS 09/20/2019 10/16/2019 2-for-1 Yes Middlefield Banc MBCN 10/07/2019 11/12/2019 2-for-1 No For a closer look at the different stages of a Stock Split go to: http://www.rightline.net/splits/index.html/#split-stages ======================================================================
Best of luck and have a Great Week!
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