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February 14, 2023 - The RightLine Report
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NOTES FROM THE EDITOR
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Reinventing Yourself as a Trader
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"QUICK LIST"
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Stock 02/14 02/14 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
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JWN 22.11 0.07 22.51 20.94 1.57/0.79 1.52
RNA 23.64 0.07 24.65 2.24/1.12 2.84
SNCY 20.95 0.81 21.34 2.05/1.03 1.26
ZIM 21.20 0.23 21.58 1.99/1 1.42
AAN 14.84 0.02 15.2 0.99/0.5 0.92
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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The US indices closed in a mixed fashion on Tuesday as the markets responded to hotter inflation than expected in the Consumer Price Index report, and its potential impact on the Federal Reserve Bank's upcoming monetary policy decisions. In other economic news, small business optimism increased slightly but remains below its 48-year average. In equities, Coca-Cola (KO $60) and Marriot International (MAR $181) both topped earnings forecasts and delivered positive guidance, while fast-food holding company Restaurant Brands International (QSR $67) - owner of Burger King, Tim Hortons, Popeye and Firehouse Subs - fell short of profit expectations, but raised its quarterly dividend. Gold and treasury yields were higher, the USD/dollar and oil prices finished lower. Feb 13, 2023 Feb 14, 2023
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Dow 34,245.93 376.66 34,089.27 -156.66
Nasdaq 11,891.79 173.67 11,960.15 68.36
S&P 500 4,137.29 46.83 4,136.13 -1.16
NYSE Volume 3.46B 3.93B
NYSE Advancers 2,336 1,483
NYSE Decliners 735 1,574
Nasdaq Volume 4.77B 5.05B
Nasdaq Advancers 2,856 2,112
Nasdaq Decliners 1,698 2,400
New Highs/Lows
02/07 02/08 02/09 02/10 02/13 02/14
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NYSE New Highs 85 66 87 42 87 102
NYSE New Lows 8 6 10 15 13 12
Nasdaq New Highs 103 100 93 61 82 86
Nasdaq New Lows 43 47 67 82 67 83
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TRADER'S TIP:
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TRADER'S TIP: "The Fed" When banks need to borrow money they go to the Federal Reserve, which sets the "discount interest rate" that member banks pay on the loans. Headed by well-known chairman Alan Greenspan, the "Fed" oversees twelve Federal Reserve Banks that in turn regulate the banks in their districts. The Federal Reserve makes sure that all banks maintain enough cash on hand to take care of their customers. They also sell and buy government securities to manage the US money supply. The Fed regularly trades currencies on the world market to support the US dollar, and warehouses gold for international agencies and foreign governments. **************************
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 - 4136.13 February 14, 2023 52-Week High: 4637.30 52-Week Low: 3491.58 Daily Trend: DOWN Weekly trend: UP Weekly Pivot Levels Resistance 3: 4340.76 Resistance 2: 4225.01 Resistance 1: 4157.73 Pivot: 4109.26 Support 1: 4041.98 Support 2: 3993.51 Support 3: 3877.76 https://www.prorightline.com/rlch/021423SPX.jpg--ECONOMIC REPORTS AND EVENTS (all times are Eastern): Monday, February 13, 2023: 13-Feb 11 am NY Fed 1-year inflation expectations 13-Feb 11 am NY Fed 5-year inflation expectations Tuesday, February 14, 2023: 14-Feb 6 am NFIB small-business index 14-Feb 8:30 am Consumer price index 14-Feb 8:30 am Core CPI 14-Feb 8:30 am CPI (year-over-year) 14-Feb 8:30 am Core CPI (year-over-year) Wednesday, February 15, 2023: 15-Feb 8:30 am Retail sales 15-Feb 8:30 am Retail sales excluding motor vehicles 15-Feb 8:30 am Empire state manufacturing index 15-Feb 9:15 am Industrial production index 15-Feb 9:15 am Capacity utilization rate 15-Feb 10 am NAHB home builders' index 15-Feb 10 am Business inventories Thursday, February 16, 2023: 16-Feb 8:30 am Initial jobless claims 16-Feb 8:30 am Continuing jobless claims 16-Feb 8:30 am Producer price index final demand 16-Feb 8:30 am Building permits 16-Feb 8:30 am Housing starts 16-Feb 8:30 am Philadelphia Fed manufacturing survey 16-Feb 11 am Real household debt (SAAR) Friday, February 17, 2023: 17-Feb 8:30 am Import price index 17-Feb 10 am Index of leading economic indicators 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: "What's Your Focus?" Although most traders give the "enter" side of the trading equation a high priority, the "exit" side is far more important. Inexperienced market players often watch their positions go up, then slide all the way back down. It's easy to forget that paper profits only become "real" when they are converted to cash. Profitable exit strategies require active management, and deserve much more attention than entries. ***********************************
STOCKS COVERED IN THIS ISSUE
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CONSUMER CYCLICAL SECTOR Nordstrom, Inc. (JWN: Consumer Cyclical/Department Stores) - 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. JWN 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 22.51 and a SELL short trigger at 20.94. When JWN 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 1.57 trailing stop. After you've got a 1.52 profit, tighten the stop to 0.79. JWN closed at 22.11 on Tuesday. Earnings Report Date: Mar 02, 2023. Beta: 2.23. Market-Cap: 3.539B. Optionable. HEALTHCARE SECTOR Avidity Biosciences, Inc. (RNA: Healthcare/Biotechnology) - NEW HIGH DIP. RNA's recent new 52-week high proves just how well this stock is performing. Sellers have pushed prices down the past few sessions, but Tuesday's rebound near support has given us an excellent BUY setup. A continuation of this latest bounce has the potential to push above the recent 52-week high and set a new one. Be ready to get on board if RNA moves up to the 24.65 level, and set a 2.24 trailing stop to control risk. Tighten the stop to 1.12 when you have banked a 2.84-point gain. Earnings Report Date: Feb 27, 2023. Beta: -0.01. Market-Cap: 1.571B. Optionable. INDUSTRIALS SECTOR Sun Country Airlines Holdings, Inc. (SNCY: Industrials/Airlines) - BULLISH BOUNCE. Everyone familiar with price charts knows that a stock tends to bounce its way higher rather than move in a straight line. The lower levels of these short-term rebounds offer a safe and often early entry into stocks that are in the process of establishing longer-term uptrends. SNCY's reaction to support on Tuesday created a Bullish Bounce setup with a BUY entry trigger at 21.34. Use a 2.05 trailing stop, which should work well with SNCY's typical daily range. Tighten it to 1.03 on a 1.26 profit. SNCY closed at 20.95 on Tuesday. Earnings Report Date: May 02, 2023. Beta: N/A. Market-Cap: 1.219B. Optionable. ZIM Integrated Shipping Services Ltd. (ZIM: Industrials/Marine Shipping) - 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 ZIM which met our setup criteria on Tuesday. The BUY trigger for this trade is at 21.58, and the trailing stop is sized at 1.99. Resize the stop to 1 upon collecting a 1.42 point gain. ZIM closed Tuesday at 21.20. Earnings Report Date: Mar 07, 2023. Beta: 2.12. Market-Cap: 2.545B. Optionable. The Aaron's Company, Inc. (AAN: Industrials/Rental & Leasing Services) - BULLISH BOUNCE. Entering a position in the early stages of a bounce is great way to get on board an up-trending stock. The "Bullish Bounce" setup identifies probable candidates by evaluating the trading action that takes place near support levels. AAN's behavior on Tuesday could very well be a sign that a new bounce is underway. Place a BUY trigger at 15.2. In the event your trigger is met, also place a 0.99 trailing stop which can be trimmed down to 0.5 when you have a 0.92 profit. AAN closed Tuesday at 14.84. Earnings Report Date: Mar 01, 2023. Beta: 1.12. Market-Cap: 456.783M. 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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