September 17, 2019 - The RightLine Report
Notes From The Editor
The traditional broker/client relationship was transformed to a large degree by the internet, which now gives traders and investors direct control over their accounts. Taking out the middleman was a major development for active traders. High-profile scandals involving investment-banking relationships also helped rid the industry of some very blatant conflicts of interest.But brokerages still thrive on commissions, even if they don't have a specific person dealing with every client. Anyone who tunes in to financial media is constantly bombarded with suggestions to trade, trade, and trade some more. One of my favorites is the commercial that makes it appear as though someone is trading from beyond the grave. Now that's commitment!
Lower commissions and the ability to buy or sell stocks with the click of a button have given traders an advantage they didn't have before. Unfortunately, it also widens the potential trap of over-trading.
Knowing when not to trade is just as important as knowing when to place an order. Those low commissions make it that much easier to justify a trade, even if the set-up is questionable. This can be problematic when a trader confronts a losing streak. It seems deceptively easy to make up lost ground when there's not much cost to entering an order.
To guard against this threat, many successful traders use a simple rule of thumb: temporarily walk away from the computer after a certain amount of losing trades. The market isn't going anywhere, and there's nothing wrong with stepping back and watching the action for a while. Observing as a neutral spectator rather than a participant, you also might notice things that you might've missed had you been actively trading.
Most traders occasionally deal with the feeling of being mentally overwhelmed. The brain must not only sort through a flood of information (price action, technical details, news stories, and so on), but also has to contend with human emotion. With so much going on, it's absolutely essential to clear your mind occasionally throughout the trading day: Take a lunch break. E-mail a friend. Take a nap.
Exercise is helpful as well. Some traders I know like to go for a walk during lunch, while others get in a full workout before the trading day starts. Whatever the approach, exercise is beneficial because it produces mood-lifting endorphins and helps you focus on something other than the market.
It all boils down to not letting the market control your actions. Today's low commissions and direct order placement make it all too easy to turn frustration into over-trading - but with a little self-control and relaxation, you'll have no trouble avoiding that common trap.
Kent Barton
Senior Analyst
Stocks Covered Today Stock Splits
Quick List
Stock 09/17 09/17 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
------ -------- -------- -------- -------- --------------- --------
IRMD 22.31 -0.78 23.34 21.49 1.85/0.93 1.82
PBYI 11.66 -0.11 11.99 1.37/0.69 1.36
AMAG 12.37 0.24 12.55 1.12/0.56 1.34
SSYS 24.68 0.06 25.06 1.71/0.85 1.26
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
Problems? If you have any difficulty viewing this report in your email go to this page where you will find a list of items that may affect normal viewing within your email client.
Questions? Send us an email using our contact form at: http://www.rightline.net/home/contact.html
Stocks Covered Today Stock Splits
Market Summary
Stocks closed moderately higher on Tuesday as traders await the upcoming monetary policy decision by the Federal Reserve Bank's Open Market Commitee on Wednesday. Economic news featured better-than-expected reads on homebuilder sentiment and industrial production. In equities, shares of Corning (GLW $28) fell after the glass and optical components maker reduced the sales outlook for its Display Technologies and Optical Communications segments, while Kraft Heinz (KHC $28) dropped hard after private equity firm 3G Capital Partners announced it recently sold 25M shares of KHC. Oil returned some of Monday's gains following reports that Saudi Arabian production may be restored sooner than expected. The USD/dollar and treasury yields declined, gold advanced.
Sep 16, 2019 Sep 17, 2019
-------------------- --------------------
Dow 27,077 -142.70 27,111 +33.98
Nasdaq 8,153.54 -23.17 8,186 +32.47
S&P 500 2,998 -9.43 3,006 +7.74
NYSE Volume 4.33B 3.86B
NYSE Advancers 1593 1569
NYSE Decliners 1345 1387
Nasdaq Volume 1.90B 1.94B
Nasdaq Advancers 1639 1429
Nasdaq Decliners 1479 1691
New Highs/Lows
09/10 09/11 09/12 09/13 09/16 09/17
--------------------------------------------
NYSE New Highs 82 102 126 88 56 58
NYSE New Lows 10 6 6 9 6 7
Nasdaq New Highs 48 76 109 102 58 63
Nasdaq New Lows 42 12 28 24 22 27
Stocks Covered Today Stock Splits
TRADER'S TIP: "Limiting Losses? Don't Over Do It"
One key element in successful trading is the ability to keep losses under control. While this consideration should certainly be included in any trading strategy, don't go overboard with the idea of keeping losses small. Your initial stop-loss should permit a realistic rise and fall in prices. If you attempt to keep losses TOO small you will end up taking unnecessary losses. Protecting your trading account should always be a priority, but don't over do it. Give each trade some room, and you'll increase the odds of success. Remember that you can always compensate for wider stops by entering with a smaller position size.
The Technical Analyst
For help with this chart, be sure to read "Understanding The Importance Of Support And Resistance"
and "Boost Your Profits With Moving Averages".
S&P 500 - 3005.70 September 17, 2019 52-Week High: 3027.98 52-Week Low: 2346.58 Daily Trend: UP Weekly trend: UP Weekly Pivot Levels Resistance 3: 3122.50 Resistance 2: 3058.77 Resistance 1: 3033.08 Pivot: 2995.04 Support 1: 2969.35 Support 2: 2931.31 Support 3: 2867.58 NASDAQ Composite - 8186.02 September 17, 2019 52-Week High: 8339.64 52-Week Low: 6190.11 Daily Trend: UP Weekly trend: DOWN Weekly Pivot Levels Resistance 3: 8624.96 Resistance 2: 8382.84 Resistance 1: 8279.77 Pivot: 8140.73 Support 1: 8037.66 Support 2: 7898.61 Support 3: 7656.49 Dow Industrials - 27110.80 September 17, 2019 52-Week High: 27398.68 52-Week Low: 21712.53 Daily Trend: UP Weekly trend: UP Weekly Pivot Levels Resistance 3: 28260.46 Resistance 2: 27670.78 Resistance 1: 27445.15 Pivot: 27081.10 Support 1: 26855.47 Support 2: 26491.42 Support 3: 25901.74
Stocks Covered Today Stock Splits
Market Calendar
ECONOMIC REPORTS AND EVENTS (all times are Eastern):Monday, September 16, 2019: 8:30 am Empire state index Tuesday, September 17, 2019: 9:15 am Industrial production 9:15 am Capacity utilization 10 am Home builders' index Wednesday, September 18, 2019: 8:30 am Housing starts 8:30 am Building permits 2 pm Fed announcement 2:30 pm Jerome Powell press conference Thursday, September 19, 2019: 8:30 am Weekly jobless claims 8:30 am Philly Fed survey 8:30 am Current account deficit 10 am Existing home sales 10 am Leading economic indicators Friday, September 20, 2019: None scheduledFor 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: "Over Extended"
Here is a quick and easy way to determine if a stock that is trending higher is "over extended." Compare the current distance between the price and the 22-DMA to previous weeks or months. If the current price is well beyond the average distance, the stock is probably overextended. This often occurs after a stock has risen sharply for several days in a row. The same comparison can be used on stocks that are trending lower and are about to reach the end of their recent drop.
Stocks Covered in This Issue
HEALTHCARE SECTORIRadimed Corporation (IRMD: Healthcare/Medical Devices) - 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. IRMD 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 23.34 and a SELL short trigger at 21.49. After one of the two orders is filled, cancel the un-triggered order and place a trailing stop at 1.85 which can be tightened to 0.93 on a 1.82 gain. IRMD closed Tuesday at 22.31. Earnings Report Date: N/A. Beta: 2.06. Market-Cap: 253.654M. Not Optionable.
Puma Biotechnology, Inc. (PBYI: Healthcare/Biotechnology) - BULLISH BOUNCE. PBYI 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 PBYI 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 11.99. Set a trailing stop of 1.37, tightening to 0.69 on a 1.36 profit. PBYI closed at 11.66 on Tuesday. Earnings Report Date: Oct 30, 2019. Beta: 1.61. Market-Cap: 453.54M. Optionable.
AMAG Pharmaceuticals, Inc. (AMAG: Healthcare/Biotechnology) - BULLISH BOUNCE. This trader-friendly setup turns repetitive stock behavior into real profits. Based on the tendency for up-trending stocks to drop briefly and then resume the up-trend, the Bullish Bounce places traders into excellent stocks when conditions are primed for more skyward movement. AMAG's current price action near moving average support signals a potential BUY entry at 12.55, followed by a 1.12 trailing stop which can be tightened to 0.56 upon earning 1.34. AMAG closed Tuesday at 12.37. Earnings Report Date: Oct 30, 2019. Beta: 0.07. Market-Cap: 419.352M. Optionable.
TECHNOLOGY SECTOR
Stratasys Ltd. (SSYS: Technology/Computer Systems) - BULLISH BOUNCE. Among other strengths, the Bullish Bounce protects traders from buying a stock "at the top" of its current cycle. The entry into this setup always takes place in upward-moving stocks that have retreated a bit under normal conditions. Now sitting at 24.68, SSYS is on our radar for a BUY entry at 25.06. If you purchase shares of SSYS, be sure to also place a trailing stop of 1.71. Snug it up to 0.85 on a 1.26 gain. Earnings Report Date: Oct 30, 2019. Beta: 2.46. Market-Cap: 1.341B. 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
---------------- ------- ------- ------- ------ -------
SPS Commerce SPSC JUL 25 AUG 23 2-for-1 Yes
Penns Woods Banc PWOD SEP 3 OCT 1 3-for-2 No
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.