February 21, 2023 - The RightLine Report
Notes From The Editor
Boost Your Trading Results by Managing Distractions
One vital skill that every trader can easily develop is the ability to manage distractions. Most of us are good at what we do, yet we sometimes allow unimportant diversions to keep us from trading as well as we are capable of. Simple everyday distractions are among the most common reasons why many traders never learn how to consistently make money in the markets.
Next time you're at your trading desk take a quick inventory of any common distractions. Does the phone ring a lot? Do you hear any disruptive noises, like air handling equipment, barking dogs, or nearby construction work? Is the TV or radio on? Do your kids, spouse, or friends regularly interrupt your train of thought with questions or conversation?
Managing these types of distractions is actually pretty easy. First, respectfully let all your friends and family know that your trading time is important and needs to be free of unnecessary interruptions. Certainly you should value your personal relationships above all else, but when it comes to your trading time you are also entitled to respectful cooperation from everyone in your life.
Trading is a highly specialized vocation, similar to flying a plane or performing surgery. No one would think about interrupting a surgeon in the middle of an open-heart procedure unless it was an absolute emergency. Once your family and associates realize the importance of what you're doing and the amount of concentration required to trade successfully, they will respect your request to limit any disruptions.
As for the other types of distractions, you can remove them - like turning off the TV and radio - or accept them as part of your environment. The rest can just be ignored. Don't struggle with these sorts of distractions; just make the decision to ignore them. View them as a choice you've made, and allow them to dissolve into background noise.
Bottom Line: Just remember that you are always in control of your environment, even though it may not seem like it. If all else fails, you can always lock your doors, turn off the phone, put on your favorite background music, shift into your best attitude, and get busy.
Trade well!
- Thomas Sutton, Editor
Stocks Covered Today Stock Splits
Quick List
Stock 02/21 02/21 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
------ -------- -------- -------- -------- --------------- --------
FTDR 28.35 -0.06 29.08 2.01/1.01 1.72
GLBE 26.10 -0.25 27.29 24.92 2.37/1.19 3.6
VVI 26.00 -0.62 26.69 25.15 1.54/0.77 1.84
PRO 27.33 -0.29 27.9 26.05 1.85/0.93 2.42
TCX 29.59 -0.69 30.44 28.18 2.26/1.13 3.4
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
US stocks posted sharp losses on Tuesday as the markets continue to wrestle with recent hot inflation data. Retailers headlined earnings news, as Walmart (WMT $147) topped quarterly profit expectations and increased its annual dividend, while Home Depot (HD $296) also beat estimates and raised its quarterly dividend, yet issued a disappointing outlook. In economic news, manufacturing activity rose but is still in contraction territory, as services activity rose more than expected and is now in the expansion zone. In addition, existing home sales were down in January, with the median existing home price - at $359,000 - continuing to rise. The USD/dollar and treasury yields moved higher, oil prices and gold finished the session lower.
Feb 20, 2023 Feb 21, 2023
-------------------- --------------------
Dow Closed 0 33,129.59 -697.10
Nasdaq Closed 0 11,492.30 -294.97
S&P 500 Closed 0 3,997.34 -81.75
NYSE Volume 0 4.14B
NYSE Advancers 0 384
NYSE Decliners 0 2,721
Nasdaq Volume 0 5.03B
Nasdaq Advancers 0 881
Nasdaq Decliners 0 3,714
New Highs/Lows
02/14 02/15 02/16 02/17 02/20 02/21
--------------------------------------------
NYSE New Highs 102 84 80 62 0 38
NYSE New Lows 12 7 15 10 0 29
Nasdaq New Highs 86 91 96 89 0 50
Nasdaq New Lows 83 63 67 77 0 131
Stocks Covered Today Stock Splits
TRADER'S TIP: "What's the Rush?"
Successful traders exercise patience and wait for premium trades. While waiting for the best setups may reduce the excitement of trading, it also lowers risk and increases the potential for profit. So which do you prefer?
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 - 3997.34 February 21, 2023
52-Week High: 4637.30
52-Week Low: 3491.58
Daily Trend: DOWN
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 4319.24
Resistance 2: 4207.42
Resistance 1: 4143.25
Pivot: 4095.60
Support 1: 4031.43
Support 2: 3983.78
Support 3: 3871.96
NASDAQ Composite - 11492.30 February 21, 2023
52-Week High: 14646.90
52-Week Low: 10088.83
Daily Trend: DOWN
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 12640.08
Resistance 2: 12242.00
Resistance 1: 12014.63
Pivot: 11843.92
Support 1: 11616.55
Support 2: 11445.84
Support 3: 11047.76
Dow Industrials - 33129.59 February 21, 2023
52-Week High: 35492.22
52-Week Low: 28660.94
Daily Trend: DOWN
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 35519.44
Resistance 2: 34705.70
Resistance 1: 34266.19
Pivot: 33891.96
Support 1: 33452.45
Support 2: 33078.22
Support 3: 32264.48
Stocks Covered Today Stock Splits
Market Calendar
ECONOMIC REPORTS AND EVENTS (all times are Eastern): Monday, February 20, 2023: 20-Feb None scheduled - MARKET CLOSED FOR PRESIDENTS DAY Tuesday, February 21, 2023: 21-Feb 9:45 am S&P flash U.S. services PMI 21-Feb 9:45 am S&P flash U.S. manufacturing PMI 21-Feb 10:00 am Existing home sales Wednesday, February 22, 2023: 22-Feb 2 pm FOMC minutes of Feb.1 meeting Thursday, February 23, 2023: 23-Feb 8:30 am Initial jobless claims 23-Feb 8:30 am GDP 23-Feb 10:50 am Atlanta Fed President Bostic speaks Friday, February 24, 2023: 24-Feb 8:30 am Consumer spending (nominal) 24-Feb 8:30 am Personal income (nominal) 24-Feb 8:30 am PCE index 24-Feb 8:30 am Core PCE index 24-Feb 8:30 am Core PCE (year-over-year) 24-Feb 10 am New home sales 24-Feb 10 am Consumer sentiment (final) 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: "A Unique Way To Trade"
Instead of trying to predict when the next big market move will take place, a trader's job is to minimize losses and drawdown while waiting for the big winning trades to show up. This unique way of looking at trading focuses on managing risk and cash flow rather than searching for magical indicators and predicting market moves. The only way to guarantee that you catch the big moves is to always be in the market.
Stocks Covered in This Issue
CONSUMER CYCLICAL SECTOR
Frontdoor, Inc. (FTDR: Consumer Cyclical/Personal Services) - BULLISH BOUNCE. FTDR has charted an upward weekly trend until recently when sellers showed up to push prices lower. On Tuesday the selling ran into solid support. A potential bounce up from this level should attract buyers and likely return FTDR to the previously established uptrend. The Bullish Bounce set-up is the basis for our BUY entry, so be ready to go long on a rise to our trigger at 29.08. Set a trailing stop of 2.01, tightening to 1.01 on a 1.72 profit. FTDR closed at 28.35 on Tuesday. Earnings Report Date: Mar 01, 2023. Beta: 0.78. Market-Cap: 2.31B. Optionable.
Global-e Online Ltd. (GLBE: Consumer Cyclical/Internet Retail) - SQUEEZE PLAY. Tuesday's trading action forced GLBE'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 GLBE 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 27.29 if GLBE moves higher, and place your order to SELL short at 24.92 if price declines to that level. As usual follow your entry with a trailing stop, 2.37 should be sufficient. Reduce your stop to 1.19 on a 3.6 gain. GLBE closed Tuesday at 26.10. Earnings Report Date: Feb 22, 2023. Beta: N/A. Market-Cap: 4.084B. Optionable.
INDUSTRIALS SECTOR
Viad Corp (VVI: Industrials/Specialty Business Services) - SQUEEZE PLAY. A look at VVI's daily chart shows what a price squeeze is all about. The constricted high-low daily trading range has produced a setup similar to a tightly coiled spring. Expect price to move sharply soon, with the direction yet to be determined. Let the upcoming market action resolve whether you will buy shares or sell short. To capture a move either way, place a BUY trigger at 26.69 and a SELL short trigger at 25.15. Once VVI shows which way it's headed, place your triggered entry order. As soon as your order is filled, follow with a trailing stop of 1.54 and tighten to 0.77 on a 1.84 gain. VVI closed Tuesday at 26.00. Earnings Report Date: May 03, 2023. Beta: 1.76. Market-Cap: 537.425M. Optionable.
TECHNOLOGY SECTOR
PROS Holdings, Inc. (PRO: Technology/Software-Application) - SQUEEZE PLAY. PRO 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. PRO is now at 27.33. We can capture price action either way by placing a BUY trigger at 27.9 and a SELL short trigger at 26.05. Once PRO 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 1.85. When you acquire a 2.42 profit, tighten the stop to 0.93. Earnings Report Date: May 01, 2023. Beta: 1.08. Market-Cap: 1.254B. Optionable.
Tucows Inc. (TCX: Technology/Software-Infrastructure) - 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 TCX. A move to the upside will trigger our BUY entry at 30.44, while a drop to 28.18 will trigger our SELL short entry. Follow your position with a 2.26 trailing stop. Tighten the stop to 1.13 once you have a 3.4 gain. TCX closed Tuesday at 29.59. Earnings Report Date: Feb 28, 2023. Beta: 0.76. Market-Cap: 320.312M. 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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