December 5, 2023 - The RightLine Report
Notes From The Editor
Say Hello To Your Perspective
There's a strong tendency for each one of us to believe that the way WE view the world is the way everyone else views the world, or perhaps SHOULD view it. We don't really think about this, we just assume it. The inclination to feel that our perspective is the only one that matters begins in early childhood. Once in place, it strongly influences all of our actions.
Unfortunately this typically limits awareness by filtering out other significant points of view. However if we're lucky we eventually become aware of two important things:
1) We have our own unique perspective
2) We can change our perspective if we choose.
The Early Days ...
Think about how a ten-month old child views the world. If they see something they want, they reach for it. If mom or dad says "no, that's not good for you," the baby ignores them and reaches for it anyway. That's because the baby doesn't have enough experience to know what's good and what isn't. Mom and Dad do know because they have much more experience.
After a certain amount of pain and suffering a young toddler begins to accept the parent's point of view. However since the parent's perspective is just too complex for a child, the youngster thinks much of it is just unnecessary noise. As a result, the child's programming is a mix of baby and parent perspective. Attitudes and actions are created around this perspective. Years later the young person has grown up to be an adult trader. However, deep down inside, many of the child's attitudes still exist.
Not only do these attitudes exist in memory, they have a powerful affect on the adult's behavior. It's often said, "the boy is the father of the man." The child has been around much longer than the adult trader. So guess who usually wins if there is a conflict between self-destructive babyish attitudes and a mature trader mind-set?
"Give it to me!"
The kid in us just wants the money ... or candy ... now! The mature trader says "hang on, there are some things we need to do in order to get the money." Let's hope that patience prevails, because putting too much attention on the money is the WORST thing a trader can do.
If you sometimes struggle with excessive thoughts of money, you can relax ... that's normal for a time. However, to be truly successful you'll have to change the way you think about wealth.
Most people begin their trading journey by focusing way too much on the potential financial gains. Though it's the most common way to start, it isn't the best way. You can bet that the carrot-on-the-stick holding our attention will always be just beyond our reach until we change our perspective.
Bottom Line: The ability to choose our perspective is a powerful skill that opens doors to better opportunities. When we choose how we view things, we can choose the best view. It's like choosing the best seat at a sporting event instead of being stuck with whatever place we're given.
That's enough trader talk for now, in the near future we'll take a look at two of the most important resources we have ... our attitudes and our actions.
Trade well,
- Thomas Sutton, Editor
Stocks Covered Today Stock Splits
Quick List
Stock 12/05 12/05 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
------ -------- -------- -------- -------- --------------- --------
CTRN 24.19 0.39 24.7 23.08 1.62/0.81 2.34
SLP 38.92 0.09 39.45 2.51/1.26 3.16
KYMR 20.61 -0.66 21.59 19.84 1.75/0.88 2.96
ARCT 22.96 -1.03 24.15 22.16 1.99/1 3.28
GNE 23.77 0.06 24.1 22.61 1.49/0.75 2.88
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 mixed on Tuesday, with smallcaps underperforming after a recent rally that bullishly pushed them beyond crucial technical levels. Market breadth favored decliners significantly, with a substantial 2:1 margin, but the strength in large-cap tech stocks, including the "Mag 7" names such as AAPL, AMZN, GOOGL, NVDA, and TSLA, helped balance the broader market.
The day marked a reversal of the previous session, with only a few heavily weighted index names preventing declines in the S&P and Nasdaq. The major averages received a boost mid-morning following an increase in the ISM services index and a sharp decline in job openings from September levels, indicating a reduction in hiring by employers.
The sectors leading the day were Technology (XLK) and Consumer Discretionary (XLY), while Materials (XLB), Energy (XLE), Communications (XLC), and REITs (XLRE) experienced the most significant declines. Noteworthy stock movements were observed in response to comments made at various Wall Street investor conferences, including cable stocks (CHTR, CMCSA) falling after Charter's statements at the UBS conference and movements in several regional banking stocks and consumer finance names such as AXP, following comments at the Goldman Sachs conference.
Oil prices reached fresh 5-month lows, gold and Treasury yields slipped, and Asia experienced weakness overnight following Moody's downgrade of China's government credit ratings outlook from stable to negative. In contrast, Europe presented a different picture, with the German DAX achieving all-time highs. Europe's Stoxx 600 gained 0.4%, Germany's DAX rose 0.8%, Britain's FTSE 100 was down 0.3%, France's CAC 40 was up 0.7%, and Spain's IBEX climbed 0.6%. The US focus remains on upcoming job data with ADP on Wednesday, jobless claims on Thursday, and nonfarm payrolls on Friday.
Dec 4, 2023 Dec 5, 2023
-------------------- --------------------
Dow 36,204.44 -41.06 36,124.56 -79.88
Nasdaq 14,185.49 -119.54 14,229.91 44.42
S&P 500 4,569.78 -24.85 4,567.18 -2.60
NYSE Volume 4.37B 3.92B
NYSE Advancers 1,413 853
NYSE Decliners 1,451 1,994
Nasdaq Volume 6.29B 6.19B
Nasdaq Advancers 2,367 1,459
Nasdaq Decliners 1,949 2,793
New Highs/Lows
11/28 11/29 11/30 12/01 12/04 12/05
--------------------------------------------
NYSE New Highs 68 97 118 179 157 103
NYSE New Lows 27 25 24 16 15 19
Nasdaq New Highs 91 149 96 168 166 89
Nasdaq New Lows 131 110 127 99 78 74
Stocks Covered Today Stock Splits
TRADER'S TIP: "Drawdown"
A drawdown is a reduction in account value due to a series of trading losses or from a decrease in the price of investments. It is usually stated either in percentage or dollar terms, and is measured from peak to valley. For example, if a trading account with an initial amount of $10,000 rose in value to $40,000, then dropped to $30,000, then increased again to $50,000, the account would have a maximum drawdown of $10,000 (which occurred when the account dropped from $40,000 to 30,000) even though the account was never in a negative position from the beginning.
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 - 4567.18 December 5, 2023
52-Week High: 4607.07
52-Week Low: 3764.49
Daily Trend: UP
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 4701.38
Resistance 2: 4639.23
Resistance 1: 4616.93
Pivot: 4577.08
Support 1: 4554.78
Support 2: 4514.93
Support 3: 4452.78
NASDAQ Composite - 14229.91 December 5, 2023
52-Week High: 14446.55
52-Week Low: 10207.47
Daily Trend: DOWN
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 14877.43
Resistance 2: 14581.26
Resistance 1: 14443.14
Pivot: 14285.09
Support 1: 14146.97
Support 2: 13988.92
Support 3: 13692.75
Dow Industrials - 36124.56 December 5, 2023
52-Week High: 36264.85
52-Week Low: 31429.82
Daily Trend: UP
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 37898.86
Resistance 2: 36914.58
Resistance 1: 36580.04
Pivot: 35930.30
Support 1: 35595.76
Support 2: 34946.02
Support 3: 33961.74
Stocks Covered Today Stock Splits
Market Calendar
ECONOMIC REPORTS AND EVENTS (all times are Eastern): MONDAY, DEC. 4 10:00 am Factory orders TUESDAY, Dec. 5 9:45 am S&P U.S. services PMI 10:00 am ISM services Nov. 10:00 am Job openings Oct. WEDNESDAY, Dec. 6 8:15 am ADP employment 8:30 am U.S. productivity (revision) Q3 8:30 am U.S. trade deficit Oct. THURSDAY, Dec. 7 8:30 am Initial jobless claims 12/2 10:00 am Wholesale inventories Oct. 3:00 pm Consumer credit Oct. FRIDAY, Dec. 8 10:00 am Consumer sentiment (prelim) Dec. 8:30 am U.S. employment report Nov.. 8:30 am U.S. unemployment rate Nov. 8:30 am U.S. hourly wages Nov. 8:30 am Hourly wages year over year 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: "Breakaway Gaps"
Breakaway gaps occur when a stock price leaps out of a consolidation or basing pattern. If the gap is to the upside, consider buying immediately, but be sure to put a stop loss just beneath the bottom of the gap. A true breakaway gap won't look back. To apply the same approach to stocks that gap lower, just reverse the procedure and enter a short position. Always use a protective stop order to protect against losses.
Stocks Covered in This Issue
CONSUMER CYCLICAL SECTOR
Citi Trends, Inc. (CTRN: Consumer Cyclical/Apparel Retail) - 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 CTRN's case we will enter a BUY should it reach the 24.7 level, or a SELL short trade if it drops to 23.08. As usual a trailing stop is essential, 1.62 which should be tightened to 0.81 on a 2.34 gain. CTRN closed Tuesday at 24.19. Earnings Report Date: N/A. Beta: 2.18. Market-Cap: 207.165M. Optionable.
HEALTHCARE SECTOR
Simulations Plus, Inc. (SLP: Healthcare/Health Information Services) - BULLISH BOUNCE. Up-trending stocks like SLP have a tendency to bounce their way skyward rather than travel higher in a straight line. After touching down to a moving average support level on Tuesday, SLP is poised to lift off again. To take advantage of this setup, prepare to BUY shares at 39.45 if positive price action occurs. As always, follow your entry with a trailing stop. A 2.51 trailer should work well with SLP. Tighten it to 1.26 on a 3.16 gainer. Earnings Report Date: Jan 02, 2024. Beta: 0.63. Market-Cap: 776.002M. Optionable.
Kymera Therapeutics, Inc. (KYMR: Healthcare/Biotechnology) - SQUEEZE PLAY. Tuesday's trading action forced KYMR'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 KYMR 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 21.59 if KYMR moves higher, and place your order to SELL short at 19.84 if price declines to that level. As usual follow your entry with a trailing stop, 1.75 should be sufficient. Reduce your stop to 0.88 on a 2.96 gain. KYMR closed Tuesday at 20.61. Earnings Report Date: Feb 21, 2024. Beta: 2.17. Market-Cap: 1.144B. Optionable.
Arcturus Therapeutics Holdings Inc. (ARCT: Healthcare/Biotechnology) - SQUEEZE PLAY. ARCT 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. ARCT is now at 22.96. We can capture price action either way by placing a BUY trigger at 24.15 and a SELL short trigger at 22.16. Once ARCT 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 1.99. When you acquire a 3.28 profit, tighten the stop to 1. Earnings Report Date: N/A. Beta: 2.58. Market-Cap: 613.567M. Optionable.
UTILITIES SECTOR
Genie Energy Ltd. (GNE: Utilities/Utilities - Regulated Electric) - 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 GNE. A move to the upside will trigger our BUY entry at 24.1, while a drop to 22.61 will trigger our SELL short entry. Follow your position with a 1.49 trailing stop. Tighten the stop to 0.75 once you have a 2.88 gain. GNE closed Tuesday at 23.77. Earnings Report Date: N/A. Beta: 0.38. Market-Cap: 651.726M. 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
---------------- ------- -------- ------- ------ -------
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.
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.
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