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February 7, 2023 - The RightLine Report
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NOTES FROM THE EDITOR
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Often the most mentally challenging part of a trade is getting to the break-even point. Depending on your time frame this can take hours, days or even weeks. In a typical trade you first make the decision to enter a selected stock after looking at number of setups. Price action triggers your entry, so you place your order, then confirm that it is filled and set your stop. Now there's nothing left to do other than relax and let the trade progress.
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"QUICK LIST"
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Stock 02/07 02/07 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
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HAIN 21.20 0.06 / 0
NEOG 20.39 0.50 20.75 1.73/0.87 1.22
RLAY 21.32 -0.24 21.96 20.46 1.5/0.75 2.52
APG 22.10 0.40 22.42 1.6/0.8 1.18
RELL 23.88 0.17 24.48 22.69 1.79/0.9 3.16
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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US stocks were higher on Tuesday following comments from Federal Reserve Bank Chairman Jerome Powell who said disinflation has begun but interest rate increases will likely continue. A light economic calendar showed the trade deficit widened at a slower pace than expected, while December consumer credit increased less than forcasts called for. Quarterly earnings announcements included video game company Take-Two Interactive Software (TTWO $114) missing analysts' expectations and warning that net bookings will be lower in the near term, while Dupont (DD $78) beat projections yet offered disappointing guidance. Gold, treasury yields and oil were all higher, the USD/dollar finished lower. Feb 6, 2023 Feb 7, 2023
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Dow 33,891.02 -34.99 34,156.69 265.67
Nasdaq 11,887.45 -119.50 12,113.79 226.34
S&P 500 4,111.08 -25.40 4,164.00 52.92
NYSE Volume 4.13B 4.4B
NYSE Advancers 773 1,909
NYSE Decliners 2,334 1,154
Nasdaq Volume 5.57B 5.77B
Nasdaq Advancers 1,538 2,666
Nasdaq Decliners 3,030 1,844
New Highs/Lows
01/31 02/01 02/02 02/03 02/06 02/07
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NYSE New Highs 104 177 203 121 61 85
NYSE New Lows 4 8 5 4 12 8
Nasdaq New Highs 138 190 199 142 92 103
Nasdaq New Lows 31 34 27 24 32 43
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TRADER'S TIP:
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TRADER'S TIP: "Choose Your Viewpoint" Successful trading is as much mental as physical. One extremely important skill to acquire is the ability to view "negative" experiences in an empowering way. For example, instead of looking at a "bad" trade as a "loser," simply consider it a trade that didn't work out as you would have preferred. The emotional investment you make in each trade accumulates in your "mental account" over the course of your trading career. As with money, when it comes to your state of mind, always invest wisely. **************************
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 - 4164.00 February 7, 2023 52-Week High: 4637.30 52-Week Low: 3491.58 Daily Trend: UP Weekly trend: UP Weekly Pivot Levels Resistance 3: 4475.60 Resistance 2: 4295.71 Resistance 1: 4216.09 Pivot: 4115.82 Support 1: 4036.20 Support 2: 3935.93 Support 3: 3756.04 https://www.prorightline.com/rlch/020723SPX.jpg--ECONOMIC REPORTS AND EVENTS (all times are Eastern): Monday, February 06, 2023: 06-Feb None scheduled Tuesday, February 07, 2023: 07-Feb 8:30 am International trade deficit 07-Feb 11 am NY Fed 1-year inflation expectations 07-Feb 11 am NY Fed 5-year inflation expectations 07-Feb 3 pm Consumer credit Wednesday, February 08, 2023: 08-Feb 10 am Wholesale inventories (revision) Thursday, February 09, 2023: 09-Feb 8:30 am Initial jobless claims 09-Feb 8:30 am Continuing jobless claims Friday, February 10, 2023: 10-Feb 10 am UMich consumer sentiment index (early) 10-Feb 10 am UMich 1-year inflation expectations (early) 10-Feb 10 am UMich 5-year inflation expectations (early) 10-Feb 2 pm Federal budget balance 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: "Only Ten Percent" Although only ten percent of individual traders use "money management," it is by far the most important aspect of any trading plan. Leave it out of any trade and you immediately place that position in a high-risk category. Many people believe they can ignore money management just because they have a small trading account, while in fact these vital concepts can be used successfully with any amount of capital. Establishing good habits with a small account not only allows your money to grow, it also prepares you to trade intelligently when you have a much larger account. ***********************************
STOCKS COVERED IN THIS ISSUE
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CONSUMER DEFENSIVE SECTOR The Hain Celestial Group, Inc. (HAIN: Consumer Defensive/Packaged Foods) - BULLISH BOUNCE. Here is another example of a stock in an established uptrend that has recently experienced a counter-trend drop. The sliding price action has now found support near a moving average zone, bouncing upward during Tuesday's session to close at 21.20. Anticipate the rebound to continue, and be ready to buy HAIN at . Follow your entry with a trailing stop of which can be tightened to on a 0 profit. Earnings Report Date: Feb 07, 2023. Beta: 0.91. Market-Cap: 1.893B. Optionable. HEALTHCARE SECTOR Neogen Corporation (NEOG: Healthcare/Diagnostics & Research) - BULLISH BOUNCE. Looking a bit frayed after sliding downhill in recent sessions, on Tuesday NEOG seemed intent on initiating a rebound. With moving average support nearby, NEOG is at a logical place for Bulls to regroup and extend the familiar uptrend that shareholders have become accustomed to. On continued buying, plan on taking long entries with a BUY at 20.75. Manage risk with a 1.73 stop. Tighten your stop to 0.87 when you have a 1.22 profit. NEOG ended the day at 20.39. Earnings Report Date: Mar 22, 2023. Beta: 0.92. Market-Cap: 4.407B. Optionable. Relay Therapeutics, Inc. (RLAY: Healthcare/Biotechnology) - SQUEEZE PLAY. Tuesday's trading action forced RLAY'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 RLAY 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 21.96 if RLAY moves higher, and place your order to SELL short at 20.46 if price declines to that level. As usual follow your entry with a trailing stop, 1.5 should be sufficient. Reduce your stop to 0.75 on a 2.52 gain. RLAY closed Tuesday at 21.32. Earnings Report Date: Feb 22, 2023. Beta: 1.01. Market-Cap: 2.577B. Optionable. INDUSTRIALS SECTOR APi Group Corporation (APG: Industrials/Engineering & Construction) - BULLISH BOUNCE. Up-trending stocks like APG 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, APG is poised to lift off again. To take advantage of this setup, prepare to BUY shares at 22.42 if positive price action occurs. As always, follow your entry with a trailing stop. A 1.6 trailer should work well with APG. Tighten it to 0.8 on a 1.18 gainer. Earnings Report Date: Feb 28, 2023. Beta: 1.48. Market-Cap: 5.169B. Optionable. TECHNOLOGY SECTOR Richardson Electronics, Ltd. (RELL: Technology/Electronic Components) - SQUEEZE PLAY. RELL 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. RELL is now at 23.88. We can capture price action either way by placing a BUY trigger at 24.48 and a SELL short trigger at 22.69. Once RELL 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 1.79. When you acquire a 3.16 profit, tighten the stop to 0.9. Earnings Report Date: Apr 04, 2023. Beta: 0.79. Market-Cap: 336.104M. 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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