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January 16, 2020 - The RightLine Report
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NOTES FROM THE EDITOR
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Every successful trader knows the importance of adapting to shifts in the market. One of the best ways to track these changes is to monitor your own trades. This allows you to see emerging trends more quickly, and helps protect you from unexpected twists and turns.
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"QUICK LIST"
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Stock 01/16 01/16 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
------ -------- -------- -------- -------- --------------- --------
ITCI 26.63 0.28 27.55 25.52 2.03/1.01 6.66
PGNY 31.61 0.58 32.76 29.99 2.77/1.39 3.46
SAIC 93.05 -1.91 94.68 7.63/3.81 3.28
CRNC 21.61 0.09 22.29 20.66 1.63/0.81 2.32
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 www.rightline.net/education/using-quicklist.html. In addition,always use the RightLine Risk Calculator before entering any position. For access to the Risk Calculator, go to www.RightLine.net and login to the Member's area. To learn more about controlling risk go to the RightLine Risk Control System at http://www.rightline.net/education/riskcontrol.html For a glossary of terms unique to The RightLine Report go to: http://www.rightline.net/education/glossary.html Problems? If you have any difficulty viewing this report, the link below will take you to a page where you will find a list of items that may affect normal viewing within your email client. http://www.rightline.net/home/reportprob.html Questions? Send us an email using our contact form at: http://www.rightline.net/home/contact.html
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MARKET SUMMARY
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Stocks closed higher on Thursday to set new record highs following the Senate passing of the USMCA USA/Mexico/Canada trade agreement. This landmark legislation came one day after the USA and China signed a "phase one" trade deal to begin leveling the playing field that for decades has favored the Chinese. Additional upbeat economic data highlighted a surge in regional manufacturing activity, a solid increase in retail sales and a decline in unemployment claims. In the earnings department, shares of Morgan Stanley rallied after the financial company released its numbers, while PPG Industries (PPG $127) and Alcoa (AA $18) shareholders responded to disappointing results by selling their positions. Gold ended the session lower, oil prices, treasury yields and the USD/dollar were higher. Jan 15, 2020 Jan 16, 2020
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Dow 29,030 +90.55 29,298 +267.42
Nasdaq 9,259 +7.37 9,357 +98.44
S&P 500 3,289 +6.14 3,317 +27.52
NYSE Volume 3.78B 3.62B
NYSE Advancers 1613 2046
NYSE Decliners 1289 851
Nasdaq Volume 2.46B 2.35B
Nasdaq Advancers 1822 2370
Nasdaq Decliners 1391 846
New Highs/Lows
01/09 01/10 01/13 01/14 01/15 01/16
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NYSE New Highs 241 218 243 230 271 298
NYSE New Lows 13 20 23 8 7 6
Nasdaq New Highs 259 216 279 295 287 379
Nasdaq New Lows 17 29 34 27 24 14
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TRADER'S TIP:
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TRADER'S TIP: "Get A Groove Going" Most companies will announce stock splits concurrent with a "major" event, such as an earnings release or during an annual shareholder's meeting. When a corporation breaks from this pattern and announces a split just before one of these events, it many times is a good "tip off" that further good news is just around the corner. **************************
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: www.rightline.net/education/how_to_use_rlr_technical_analyst.html. S&P 500 - 3316.81 January 16, 2020
52-Week High: 3317.11
52-Week Low: 2612.86
Daily Trend: UP
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 3391.02
Resistance 2: 3322.67
Resistance 1: 3294.01
Pivot: 3254.32
Support 1: 3225.66
Support 2: 3185.97
Support 3: 3117.62
http://www.rightline.net/rlch/011620SPX.jpg
NASDAQ Composite - 9357.13 January 16, 2020
52-Week High: 9357.92
52-Week Low: 6953.23
Daily Trend: UP
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 9702.58
Resistance 2: 9410.88
Resistance 1: 9294.87
Pivot: 9119.18
Support 1: 9003.17
Support 2: 8827.48
Support 3: 8535.78
Dow Industrials - 29297.64 January 16, 2020
52-Week High: 29300.32
52-Week Low: 24088.90
Daily Trend: UP
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 29931.37
Resistance 2: 29340.93
Resistance 1: 29082.35
Pivot: 28750.49
Support 1: 28491.91
Support 2: 28160.05
Support 3: 27569.61
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MARKET CALENDAR
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--ECONOMIC REPORTS AND EVENTS (all times are Eastern):
Monday, January 13, 2020: 13-Jan 10 am Eric Rosengren speaks 13-Jan 12:40pm Raphael Bostic speaks 13-Jan 2 pm Federal budget Tuesday, January 14, 2020: 14-Jan 6 am NFIB small business index 14-Jan 8:30 am Consumer price index 14-Jan 8:30 am Core CPI 14-Jan 9 am John Williams speaks 14-Jan 1 pm Esther George speaks Wednesday, January 15, 2020: 15-Jan 8:30 am Producer price index 15-Jan 8:30 am Empire state index 15-Jan 11 am Patrick Harker speaks 15-Jan 12 noon Rob Kaplan speaks 15-Jan 2 pm Beige Book Thursday, January 16, 2020: 16-Jan 8:30 am Weekly jobless claims 16-Jan 8:30 am Retail sales 16-Jan 8:30 am Retail sales ex-autos 16-Jan 8:30 am Philly Fed 16-Jan 8:30 am Import price index 16-Jan 10 am Business inventories 16-Jan 10 am NAHB home builders' index Friday, January 17, 2020: 17-Jan 8:30 am Housing starts 17-Jan 8:30 am Building permits 17-Jan 9 am Patrick Harker speaks 17-Jan 9:15 am Industrial production 17-Jan 9:15 am Capacity utilization 17-Jan 10 am Consumer sentiment index 17-Jan 10 am Job openings For a chart of typical Up or Down market reactions to specific major US economic reports, go to "Economic Indicator Effects" at this link: http://www.rightline.net/education/economic.html
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TRADER'S TIP:
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TRADER'S TIP: "Short-term Trading = Long Term Results" Occasionally we hear from traders who are frustrated and can't seem to do anything right. They usually haven't made money for a while and are starting to feel as if they never will. The problem could be thinking short-term -- not about their trades but about their results. Even if your trades last only minutes or hours, you have to think about your results over the long term. The laws of probabilities allow for losing streaks which can sometimes run longer than you think is possible. Realize that when you have a run of losers, it doesn't necessarily reflect your skill as a trader. Every trader - no matter how good - has some periods of time when they do poorly. The most important thing you can do is to keep working at it day after day. When combined with Risk Management, persistence and hard work lead to good results. ***********************************
STOCKS COVERED IN THIS ISSUE
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HEALTHCARE SECTOR Intra-Cellular Therapies, Inc. (ITCI: Healthcare/Biotechnology) - SQUEEZE PLAY. Thursday's trading action forced ITCI'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 ITCI 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 27.55 if ITCI moves higher, and place your order to SELL short at 25.52 if price declines to that level. As usual follow your entry with a trailing stop, 2.03 should be sufficient. Reduce your stop to 1.01 on a 6.66 gain. ITCI closed Thursday at 26.63. Earnings Report Date: N/A. Beta: 1.95. Market-Cap: 1.476B. Optionable. Progyny, Inc. (PGNY: Healthcare/Health Information Services) - SQUEEZE PLAY. PGNY is caught in a dilemma. The stock's compressed price range on Thursday 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. PGNY is now at 31.61. We can capture price action either way by placing a BUY trigger at 32.76 and a SELL short trigger at 29.99. Once PGNY 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 2.77. When you acquire a 3.46 profit, tighten the stop to 1.39. Earnings Report Date: N/A. Beta: N/A. Market-Cap: 2.657B. Optionable. TECHNOLOGY SECTOR Science Applications International Corporation (SAIC: Technology/Information Technology Services) - NEW HIGH DIP. Thursday's price action is telling us that SAIC is preparing to move back up to the 52-week high that was set just a few days ago. Our BUY trigger at 94.68 is ready to take advantage of a likely bounce from the current support level. Once your order is filled, enter a trailing stop of 7.63. Resize the stop to 3.81 after you reach a 3.28 profit. Earnings Report Date: Mar 25, 2020. Beta: 1.27. Market-Cap: 5.371B. Optionable. Cerence Inc. (CRNC: Technology/Software-Application) - SQUEEZE PLAY. A look at CRNC'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 22.29 and a SELL short trigger at 20.66. Once CRNC shows which way it's headed, place your triggered entry order. As soon as your order is filled, follow with a trailing stop of 1.63 and tighten to 0.81 on a 2.32 gain. CRNC closed Thursday at 21.61. Earnings Report Date: N/A. Beta: N/A. Market-Cap: 786.567M. 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: http://www.rightline.net/education/riskcontrol.html Use "Gap Adjusted Entries" to reset the Entry Price for stocks that gap beyond recommended entry levels. Link: http://www.rightline.net/education/gap-adjusted.html ***********************************
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 ---------------- ------- -------- ------- ------ ------- Penns Woods Banc PWOD 09/03/2019 10/01/2019 3-for-2 No Equity Lifestyle ELS 09/20/2019 10/16/2019 2-for-1 Yes Middlefield Banc MBCN 10/07/2019 11/12/2019 2-for-1 No For a closer look at the different stages of a Stock Split go to: http://www.rightline.net/splits/index.html/#split-stages ======================================================================
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