Notes From The Editor

Writer Sydney Harris says, "An idealist believes the short run doesn't count. A cynic believes the long run doesn't matter. A realist believes that what is done or left undone in the short run determines the long run."

Mr. Harris must have spent some time observing the stock market, for his statement just about sums up the different personality types on Wall Street. Hope springs eternal and so does cynicism, yet there doesn't seem to be an over-supply of realism.

Many investors I've met prefer wishful thinking to reality, and I know quite a few traders who appear to be motivated mainly by skepticism. But realistic market players are a unique group, and undoubtedly the most successful.

Success in the stock market calls for more than just good trading tactics - it requires a winning attitude. This isn't the same thing as blind optimism or overzealous cheerleading. Winners consistently approach the market with realistic expectations. Once adopted, this attitude instills confidence in your trading abilities. You know that the market can deliver windfall profits, but you don't let excessive exhuberance keep you from carefully controlling risk.

You also know that "losing" is a regular aspect of trading the markets, yet you don't let fear and anxiety dominate your feelings. You successfully leverage your trades when you are convinced there is sufficient evidence to do it.

At the heart of your winning attitude is awareness. Not just of the stock market and how it operates, but awareness that courage is a choice you can always make, no matter how challenged you may feel at the moment.

Trading successfully isn't rocket science, though it does take commitment. Just as you would review your trades and learn from them, take the time to review your attitudes, and adjust them to reflect a realistic winning attitude.

Attitude management is an acquired skill, just like every other aspect of trading and investing. And remember, a wish seldom changes anything, but a decision changes everything. I've found that when I decide I want to do something, I usually do it.

Trade well!

~ Thomas Sutton, Editor

Quick List

    
Stock     01/11     01/11      Buy      Short   Trailing Stops     Gain 
Symbol    Price      +/-      Entry     Entry   Initial/Tighten   Amount 
------  --------  --------  --------  --------  ---------------  --------

CLF       22.20     -0.45      22.6                  1.67/0.84      1.72
X         24.39     -0.30     24.75                     1.99/1      1.68
TX        46.19     -0.21     46.91                  3.55/1.78       2.6
MKC       95.21      0.58     96.46                  6.07/3.04      3.42
DICE      20.47      0.48     20.99     18.94        2.05/1.03      5.46

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.

Market Summary

The markets moved higher on Tuesday after Federal Reserve Bank Chair Jerome Powell suggested a soft economic landing is likely as the Central Bank reduces its emergency stimulus measures and tightens monetary policy. In other economic news, small business optimism improved more than predicted, while inflation and labor shortages continue to cause investor concerns. On the equities front, Illumina (ILMN $424), CVS Health (CVS $106) and Shake Shack (SHAK $77) all released upbeat guidance. The share price of all three companies advanced higher. Oil prices and gold were noticeably higher, the USD/dollar was lower. Treasuries were mostly higher, with yields on the longer end coming under pressure.

                        Jan 10, 2022           Jan 11, 2022   
                  --------------------   --------------------
Dow                 36,068.87  -162.79     36,252.02   183.15
Nasdaq              14,942.83     6.93     15,153.45   210.62
S&P 500              4,670.29    -6.74      4,713.07    42.78

NYSE Volume                      4.66B                  4.12B
NYSE Advancers                   1,219                  2,461
NYSE Decliners                   2,133                    892

Nasdaq Volume                    5.47B                  4.41B
Nasdaq Advancers                 1,598                  3,207
Nasdaq Decliners                 3,131                  1,439

                                 New Highs/Lows

                   01/05  01/05  01/06  01/07  01/10  01/11
                 --------------------------------------------
NYSE New Highs       132    112     64    101     95     96
NYSE New Lows        118     38    185    105    205     57
Nasdaq New Highs     123    104     90    103     87     45
Nasdaq New Lows      406    138    612    338    740    172
   

TRADER'S TIP: "Prevent Overtrading - Be Selective"

Traders will sometimes say to themselves - "Here I am with money in my trading account, so I'm going to trade SOMETHING today!" Unfortunately what they do next usually qualifies as "over trading." Remember that patience is a major key to success in this business, so always be selective about the trades you take.

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 - 4713.07 January 11, 2022

52-Week High: 4818.62
52-Week Low: 3694.12
Daily Trend: DOWN
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 5031.22
Resistance 2: 4875.34
Resistance 1: 4776.18
Pivot: 4719.46
Support 1: 4620.30
Support 2: 4563.58
Support 3: 4407.70

NASDAQ Composite - 15153.45 January 11, 2022

52-Week High: 16212.23
52-Week Low: 12397.05
Daily Trend: DOWN
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 17170.91
Resistance 2: 16196.40
Resistance 1: 15566.15
Pivot: 15221.89
Support 1: 14591.64
Support 2: 14247.38
Support 3: 13272.87
        
Dow Industrials - 36252.02 January 11, 2022

52-Week High: 36952.65
52-Week Low: 29856.30
Daily Trend: DOWN
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 38114.18
Resistance 2: 37273.06
Resistance 1: 36752.36
Pivot: 36431.94
Support 1: 35911.24
Support 2: 35590.82
Support 3: 34749.70
 

Market Calendar

ECONOMIC REPORTS AND EVENTS (all times are Eastern):    

Monday, January 10, 2022:
10-Jan  10 am   Wholesale inventories (revision)

Tuesday, January 11, 2022:
11-Jan   6 am   NFIB small-business index

Wednesday, January 12, 2022:
12-Jan  8:30 am   Consumer price index
12-Jan  8:30 am   Core CPI
12-Jan   2 pm   Federal budget
12-Jan   2 pm   Beige book

Thursday, January 13, 2022:
13-Jan  8:30 am   Initial jobless claims (regular state program)
13-Jan  8:30 am   Continuing jobless claims (regular state program)
13-Jan  8:30 am   Producer price index

Friday, January 14, 2022:
14-Jan  8:30 am   Retail sales
14-Jan  8:30 am   Retail sales excluding autos
14-Jan  8:30 am   Import price index
14-Jan  9:15 am   Industrial production
14-Jan  9:15 am   Capacity utilization
14-Jan  10 am   UMich consumer sentiment index (preliminary)
14-Jan  10 am   Business inventories


For a chart of typical Up or Down market reactions to specific major US economic reports 
go to:  Economic Indicator Effects

TRADER'S TIP: "Using The Gap Open Tactic When Selling Short"

The Gap Open Tactic works as well when we sell short as it does when we buy a stock. If the stock gaps down at the open, wait for it to take out its low of the first half-hour then enter 0.25 below that point. For more on the Gap Open Tactic go to:http://www.rightline.net/education/gapopen.html

Stocks Covered in This Issue

BASIC MATERIALS SECTOR

Cleveland-Cliffs Inc. (CLF: Basic Materials/Steel) - 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 22.20. Anticipate the rebound to continue, and be ready to buy CLF at 22.6. Follow your entry with a trailing stop of 1.67 which can be tightened to 0.84 on a 1.72 profit. Earnings Report Date: Feb 23, 2022. Beta: 2.18. Market-Cap: 11.102B. Optionable.

United States Steel Corporation (X: Basic Materials/Steel) - BULLISH BOUNCE. Up-trending stocks like X 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, X is poised to lift off again. To take advantage of this setup, prepare to BUY shares at 24.75 if positive price action occurs. As always, follow your entry with a trailing stop. A 1.99 trailer should work well with X. Tighten it to 1 on a 1.68 gainer. Earnings Report Date: Jan 26, 2022. Beta: 2.11. Market-Cap: 6.591B. Optionable.

Ternium S.A. (TX: Basic Materials/Steel) - BULLISH BOUNCE. If you are looking for another bouncer with profits in mind, TX fits the bill. Shares have been in retreat-mode lately, but now this stock is in the process of bouncing from support. Currently priced at 46.19, plan to buy shares at 46.91 and use a 3.55 trailing stop. Tighten the stop to 1.78 on a 2.6 gain. Earnings Report Date: Feb 15, 2022. Beta: 1.58. Market-Cap: 9.067B. Optionable.

CONSUMER DEFENSIVE SECTOR

McCormick & Company, Incorporated (MKC: Consumer Defensive/Packaged Foods) - NEW HIGH DIP. For a stock, the ladder to the top has rungs made up of 52-week highs. Each step up is followed by profit taking that usually causes a temporary pullback. The New High Dip setup uses these dips for safe entries into strong stocks. MKC is now showing strength, so plan to BUY shares when this winner reaches our trigger at 96.46. Follow your position with a 6.07 trailing stop, which you can tighten to 3.04 when you have gained 3.42 points. MKC last closed at 95.21. Earnings Report Date: Jan 27, 2022. Beta: 0.48. Market-Cap: 25.444B. Optionable.

HEALTHCARE SECTOR

DICE Therapeutics, Inc. (DICE: Healthcare/Biotechnology) - SQUEEZE PLAY. Tuesday's trading action forced DICE'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 DICE 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 20.99 if DICE moves higher, and place your order to SELL short at 18.94 if price declines to that level. As usual follow your entry with a trailing stop, 2.05 should be sufficient. Reduce your stop to 1.03 on a 5.46 gain. DICE closed Tuesday at 20.47. Earnings Report Date: N/A. Beta: N/A. Market-Cap: 782.597M. Not 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.

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  
---------------- -------     --------    -------     ------  -------   
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
    

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.

Disclaimer

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

Click Here To Unsubscribe