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February 8, 2022 - The RightLine Report
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NOTES FROM THE EDITOR
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Do you tend to feel like you're always too late or too early on your trades? Some psychologists suggest that a solution to this predicament may be found by looking inside ourselves.
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"QUICK LIST"
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Stock 02/08 02/08 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
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UAN 101.00 -0.05 103.34 96.54 6.8/3.4 10.76
RENN 21.78 0.50 22.17 1.63/0.82 3.2
FLO 28.47 0.20 28.95 1.56/0.78 1.2
XP 32.17 0.19 32.7 2.58/1.29 3.38
BCO 70.00 0.37 71.05 67.35 3.7/1.85 4.14
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 rallied on Tuesday depite a widening trade deficit and a drop in small business optimism to the lowest level in 11 months. In earnings news, Harley-Davidson (HOG $42)announced a 32% jump in revenues for the quarter, while Pfizer (PFE $52) topped earnings expectations but fell short in the revenue department. Gold and the USD/dollar finished higher, oil pricess were lower. Treasuries were also lower as yields went up across the board. Feb 7, 2022 Feb 8, 2022
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Dow 35,091.13 1.39 35,462.78 371.65
Nasdaq 14,015.67 -82.34 14,194.45 178.79
S&P 500 4,483.87 -16.66 4,521.54 37.67
NYSE Volume 4.29B 4.43B
NYSE Advancers 1,801 2,025
NYSE Decliners 1,566 1,311
Nasdaq Volume 4.3B 4.26B
Nasdaq Advancers 2,709 2,957
Nasdaq Decliners 2,016 1,726
New Highs/Lows
02/01 02/02 02/03 02/04 02/07 02/08
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NYSE New Highs 63 76 56 67 53 58
NYSE New Lows 48 55 150 265 199 242
Nasdaq New Highs 57 56 38 45 50 71
Nasdaq New Lows 123 114 237 347 237 249
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TRADER'S TIP:
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TRADER'S TIP: "Key Split Dates" There are several dates to understand in the life cycle of a split. ~ The Announcement Date is the date that the stock split is announced. ~ The Record Date is the date that owners of the stock are technically entitled to the stock dividend or split. ~ The Pay Date is the date that owners of record are paid the stock dividend or split. ~ The Execution Date - usually one business day after the Pay Date - is the date that the stock price adjusts for the split on its respective exchange. Simple enough, but in addition to these definitions there is further date distinction between which shareholders receive dividends vs splits. To receive a cash dividend you must own the stock ON the Record Date. Any time thereafter you will still receive the dividend even if you have sold the stock before its pay date. In the case of a stock split, as long as you buy the stock BEFORE the Execution Date you will see the effect of the split in your account; the date of record has no bearing. As traders, we are primarily interested in the announcement and execution dates. These dates have stock price movements associated with them. The Date of Record has relevance and often can be a turning point in the trend of the stock. However, it doesn't affect whether you are entitled to the split on the Execution Date. **************************
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 - 4521.54 February 8, 2022 52-Week High: 4818.62 52-Week Low: 3723.34 Daily Trend: DOWN Weekly trend: DOWN Weekly Pivot Levels Resistance 3: 4865.86 Resistance 2: 4684.57 Resistance 1: 4592.55 Pivot: 4503.28 Support 1: 4411.26 Support 2: 4321.99 Support 3: 4140.70 https://www.prorightline.com/rlch/020822SPX.jpg--ECONOMIC REPORTS AND EVENTS (all times are Eastern): Monday, February 07, 2022: 07-Feb 3 pm Consumer credit Tuesday, February 08, 2022: 08-Feb 6 am NFIB small-business index 08-Feb 8:30 am International trade 08-Feb 11 am Real household debt (year-over-year) Wednesday, February 09, 2022: 09-Feb 10 am Wholesale inventories (revision) Thursday, February 10, 2022: 10-Feb 8:30 am Initial jobless claims 10-Feb 8:30 am Continuing jobless claims 10-Feb 8:30 am Consumer price index (month-to-month) 10-Feb 8:30 am Core CPI (month-to-month) 10-Feb 8:30 am Consumer price index (year-to-year) 10-Feb 8:30 am Core CPI (year-to-year) 10-Feb 2 pm Federal budget Friday, February 11, 2022: 11-Feb 10 am UMich consumer sentiment index (preliminary) 11-Feb 10 am UMich 5-year inflation expectations (preliminary) 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: "Accredited Investor" This is the SEC term for a person or entity meeting any of the criteria listed below. Certain restricted offerings, hedge funds, limited partnerships, and angel investor networks are open only to accredited investors. 1) Any director, executive officer, or general partner of the issuer of the securities being offered or sold, or any director, executive officer or general partner of a general partner of that issuer. 2) Any natural person whose individual net worth, or joint net worth with that person's spouse, at the time of his purchase exceeds $1,000,000. 3) Any natural person who had individual income in excess of $200,000 in each of the two most recent years or joint income with that person's spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year. 4) Any trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase of the securities is directed by a person who has such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of the prospective investment. 5) Any organization that was not formed for the purpose of acquiring the securities being sold, with total assets in excess of $5,000,000. 6) Any entity in which all of the equity owners are Accredited Investors. ***********************************
STOCKS COVERED IN THIS ISSUE
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BASIC MATERIALS SECTOR CVR Partners, LP (UAN: Basic Materials/Agricultural Inputs) - SQUEEZE PLAY. In certain stocks a tightly constricted price range is a sign that neither bulls nor bears are confident of winning in the near term. This often means that the side that gives up first causes a quick move in the opposite direction. In these fear dominated skirmishes, opposing traders always benefit from the retreat. In the Squeeze Play setup you can actually play both sides of the inevitable surge. UAN traders reached this state of stand-off on Tuesday with the tightest range of the past seven days. You can take advantage of their efforts by placing a low risk BUY trigger at 103.34 and a SELL short trigger at 96.54. After one of the two orders is filled, cancel the un-triggered order and place a trailing stop at 6.8 which can be tightened to 3.4 on a 10.76 gain. UAN closed Tuesday at 101.00. Earnings Report Date: Feb 22, 2022. Beta: 1.66. Market-Cap: 1.079B. Optionable. CONSUMER CYCLICAL SECTOR Renren Inc. (RENN: Consumer Cyclical/Auto & Truck Dealerships) - 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 RENN which met our setup criteria on Tuesday. The BUY trigger for this trade is at 22.17, and the trailing stop is sized at 1.63. Resize the stop to 0.82 upon collecting a 3.2 point gain. RENN closed Tuesday at 21.78. Earnings Report Date: N/A. Beta: 1.60. Market-Cap: 523.143M. Optionable. CONSUMER DEFENSIVE SECTOR Flowers Foods, Inc. (FLO: Consumer Defensive/Packaged Foods) - BULLISH BOUNCE. Another bullish bouncer, FLO appears ready to resume trading in an uptrend after recent selling forced the stock lower for several days. Tuesday's positive price action near Moving Average support says it's time to BUY shares if FLO reaches our entry trigger set at 28.95. Also place a 1.56 trailing stop which can be narrowed to 0.78 when you reach a 1.2 profit. FLO closed Tuesday at 28.47. Earnings Report Date: Feb 10, 2022. Beta: 0.26. Market-Cap: 6.018B. Optionable. FINANCIAL SERVICES SECTOR XP Inc. (XP: Financial Services/Capital Markets) - 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. XP's behavior on Tuesday could very well be a sign that a new bounce is underway. Place a BUY trigger at 32.7. In the event your trigger is met, also place a 2.58 trailing stop which can be trimmed down to 1.29 when you have a 3.38 profit. XP closed Tuesday at 32.17. Earnings Report Date: Feb 21, 2022. Beta: 1.64. Market-Cap: 18.001B. Optionable. INDUSTRIALS SECTOR The Brink's Company (BCO: Industrials/Security & Protection Services) - SQUEEZE PLAY. The struggle between buyers and sellers has resulted in BCO's narrowest trading range of the past seven sessions. With neither group able to take complete control on Tuesday, the stock's short term destiny is up for grabs. You can capitalize on this unusually tight condition by placing both a BUY order at 71.05 and a SELL order at 67.35. Regardless of which order is triggered, cancel the other one and follow your entry with a 3.7 trailing stop. Tighten the stop to 1.85 once you have a 4.14 gain. BCO closed Tuesday at 70.00. Earnings Report Date: Feb 23, 2022. Beta: 1.56. Market-Cap: 3.441B. 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 ---------------- ------- -------- ------- ------ ------- ePlus PLUS 11/9/2021 12/14/2021 2-for-1 Yes NAPCO Security NSSC 12/8/2021 1/5/2022 2-for-1 Yes AeroCentury Corp ACY 12/17/2021 1/10/2022 5-for-1 No Merchants Bancorp MBIN 11/17/2021 1/18/2022 2-for-1 No SMART Global Hold SGH 1/4/2022 2/2/2022 2-for-1 Yes 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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The RightLine Report is an information service for investors and traders. It is not a solicitation nor a recommendation or offer to buy or sell securities. The information provided is obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. The publishers of The RightLine Report are not brokers or financial advisors, and are not acting in any way to influence the purchase or sale of any security. Stock picks, entry points and exit points should be considered an information resource to assist the trader in developing a trading plan and it is the sole responsibility of the reader to conduct his or her own due diligence before executing a trade. Trading securities should be considered speculative with a high degree of volatility and risk. The publishers of The RightLine Report recommend that anyone trading securities should do so with caution, exercise prudent trading discipline and have a personal risk management strategy in place before doing so. It is possible at this or some subsequent date, the publishers and staff of The Pro Right Line Corp. may own, buy or sell securities presented. The Pro Right Line Corp. is not a financial advisory service. Its publishers, owners or investors, are not liable for any losses or damages, monetary or otherwise, that result from the content of The RightLine Report. Past RightLine Report performance may not be indicative of future performance. All subscriptions and/or use of the RightLine.net website are subject to RightLine's "Terms of Use" and "Subscriber Terms & Conditions" which are posted at www.rightline.net. Any REDISTRIBUTION of the above information, without The RightLine's written consent, is STRICTLY PROHIBITED. Copyright / The Pro Right Line Corporation - All Rights Reserved To Unsubscribe, send an email to cs@prorightline.com or call 800-737-4518. |