January 17, 2023 - The RightLine Report
Notes From The Editor
Among my favorite books is John Hayden's "The 21 Irrefutable Truths of Trading." Having traded successfully for many years, Hayden is convinced that our deep beliefs are the primary forces that lead to profitable market interaction. He encourages us to become familiar with our deeper thoughts in order to promote qualities that are essential to healthy trading. This approach resonates with my personal experiences, so I've included a short excerpt below to help traders who want to improve their skills from the foundation up.
Trade well!
- Thomas Sutton, Editor
Faith As Your Foundation For Trading
"You must use faith to become certain that your ability as a trader and your trading methodology will ultimately enable you to arrive at your goal. Currently you may not know exactly how you will get there, but you must become certain that you will eventually succeed. It is vitally important that you understand that as you increase faith and develop certainty, your ability as a trader will continue to improve, eventually guaranteeing your triumph.
In other words, airplane pilots will retain their faith and level of certainty about arriving at their intended destination regardless of the obstacles en route. They may have to take a detour around a large storm, but they will eventually land safely. Just as the level of certainty of the airline pilot is unwavering, so your level of certainty as a trader must remain unwavering.
Faith breeds confidence, success, and certainty. Faith fights doubt and uncertainty, which lead to fear, doubt, despair, disappointment, and hesitation. Faith will overcome the four primary obstacles that all traders encounter. The first obstacle is the trader's mind. It is in the mind where our abilities reside, and where beliefs and values exist. Faith will overcome any limiting values and beliefs.
The second obstacle is fundamental analysis. Regardless of our trading abilities, there's always some fundamental aspect about the markets that we lack information about or lack understanding of. The third obstacle is technical analysis. As with fundamental analysis, regardless of the abilities of the trader there will always be a new and perhaps more efficient way to perceive the markets technically. The fourth obstacle is the markets themselves. Markets can be unpredictable and inconsistent, and they possess endless variations. The trader who possesses faith will overcome all these obstacles.
Your goal in creating faith in your trading abilities is to know that you will overcome all obstacles, and that you will eventually become a very profitable trader. It is a matter not of if you become a profitable trader, but when. It is your faith, and developing a sense of certainty about yourself and your trading ability, that will allow you to learn, research, and apply what you learn to trading. Currently you have a lot of beliefs that involve faith and certainty in your everyday life. You must add trading to this list."
- John Hayden
Stocks Covered Today Stock Splits
Quick List
Stock 01/17 01/17 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
------ -------- -------- -------- -------- --------------- --------
USM 22.59 0.29 22.95 1.88/0.94 1.28
LKNCY 23.69 -0.71 24.36 22.62 1.74/0.87 2.68
SDGR 23.61 -0.22 24.33 22.67 1.66/0.83 2.24
VRNA 23.69 -0.23 24.52 22.72 1.8/0.9 4.46
INTA 27.16 0.23 27.59 2.48/1.24 1.74
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.
Stocks Covered Today Stock Splits
Market Summary
The major US stock averages were mixed on Tuesday as earnings season continues to roll forward. Goldman Sachs Group (GS $350) fell short of profit estimates with considerably lower net revenues in assets and wealth management, while Travelers Companies (TRV $185) warned that its upcoming results will be lower than expected. A light economic calendar showed an unexpected decline for New York manufacturing in January. Gold and the USD/dollar were both lower, oil prices moved higher and treasury yields were mixed.
Jan 16, 2023 Jan 17, 2023
-------------------- --------------------
Dow Closed 0 33,910.85 -391.76
Nasdaq Closed 0 11,095.11 15.96
S&P 500 Closed 0 3,990.97 -8.12
NYSE Volume 0 4.3B
NYSE Advancers 0 1,691
NYSE Decliners 0 1,423
Nasdaq Volume 0 5.19B
Nasdaq Advancers 0 2,415
Nasdaq Decliners 0 2,253
New Highs/Lows
01/10 01/11 01/12 01/13 01/16 01/17
--------------------------------------------
NYSE New Highs 61 96 108 104 0 126
NYSE New Lows 6 7 12 6 0 10
Nasdaq New Highs 102 150 139 122 0 136
Nasdaq New Lows 39 45 26 20 0 23
Stocks Covered Today Stock Splits
TRADER'S TIP: "The Market is Out of Control!!"
Many traders subconsciously try to control the markets by placing too much emphasis on their trade entries. This is usually an attempt to force the market to do their bidding by requiring it to meet a long list of criteria before they get in. However, once in, the market will always do whatever it wants. This is why we emphasize trade management. Keep losses small and let winners grow. The market is literally out of anyone's control! As a result, success in stocks has a lot more to do with exits than entries.
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 - 3990.97 January 17, 2023
52-Week High: 4637.30
52-Week Low: 3491.58
Daily Trend: UP
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 4213.43
Resistance 2: 4086.77
Resistance 1: 4042.93
Pivot: 3960.11
Support 1: 3916.27
Support 2: 3833.45
Support 3: 3706.79
NASDAQ Composite - 11095.11 January 17, 2023
52-Week High: 14740.54
52-Week Low: 10088.83
Daily Trend: UP
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 11906.42
Resistance 2: 11412.00
Resistance 1: 11245.58
Pivot: 10917.58
Support 1: 10751.16
Support 2: 10423.16
Support 3: 9928.74
Dow Industrials - 33910.85 January 17, 2023
52-Week High: 35996.46
52-Week Low: 28660.94
Daily Trend: UP
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 35863.28
Resistance 2: 34942.76
Resistance 1: 34622.68
Pivot: 34022.24
Support 1: 33702.16
Support 2: 33101.72
Support 3: 32181.20
Stocks Covered Today Stock Splits
Market Calendar
ECONOMIC REPORTS AND EVENTS (all times are Eastern): Monday, January 16, 2023: 16-Jan None scheduled. Martin Luther King Jr. Day Tuesday, January 17, 2023: 17-Jan 8:30 am Empire state manufacturing index Wednesday, January 18, 2023: 18-Jan 8:30 am Retail sales 18-Jan 8:30 am Retail sales ex motor vehicles 18-Jan 8:30 am Producer price index, final demand 18-Jan 9:15 am Industrial production 18-Jan 9:15 am Capacity utilization 18-Jan 10 am NAHB home builders' index 18-Jan 10 am Business inventories (revision) 18-Jan 2 pm Beige Book Thursday, January 19, 2023: 19-Jan 8:30 am Initial jobless claims 19-Jan 8:30 am Continuing jobless claims 19-Jan 8:30 am Building permits (SAAR) 19-Jan 8:30 am Housing starts (SAAR) 19-Jan 8:30 am Philadelphia Fed manufacturing index Friday, January 20, 2023: 20-Jan 10 am Existing home sales (SAAR) For 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: "Sometimes You Gotta . . ."
The fear of "missing out" can cloud a trader's judgment, so be sure to base all buy or sell decisions on careful planning instead of emotional reactions. The market is full of opportunities - there's plenty for everyone. Rushing in can lead to problems, so remember the old saying . . . "sometimes you gotta slow down to go fast!"
Stocks Covered in This Issue
COMMUNICATION SERVICES SECTOR
United States Cellular Corporation (USM: Communication Services/Telecom Services) - BULLISH BOUNCE. Positive price behavior near moving average support on Tuesday qualifies USM for a Bullish Bounce setup. After several sessions of declining prices, USM should soon begin trading in step with its established weekly uptrend. Tell your broker to BUY shares if USM moves up to our entry trigger set at 22.95. You can also enter a 1.88 trailing stop, to be replaced with a 0.94 trailing stop when you obtain a 1.28 profit. USM closed Tuesday at 22.59. Earnings Report Date: Feb 15, 2023. Beta: 0.61. Market-Cap: 1.925B. Optionable.
CONSUMER CYCLICAL SECTOR
Luckin Coffee Inc. (LKNCY: Consumer Cyclical/Restaurants) - SQUEEZE PLAY. Tuesday's narrow price range has created a potentially profitable setup in LKNCY, as sellers and buyers find themselves in a near tie for control of price direction. The next short-term trend could go either way, so prepare for a move out of the draw within the next day or so. Set a BUY entry at 24.36 and a SELL short entry at 22.62. Let LKNCY's price action determine your long or short entry. Once the order is filled, place a 1.74 trailing stop, and tighten it to 0.87 upon getting a 2.68 gain. LKNCY closed Tuesday at 23.69. Earnings Report Date: Mar 24, 2023. Beta: -0.69. Market-Cap: 6.28B. Not Optionable.
HEALTHCARE SECTOR
Schrodinger, Inc. (SDGR: Healthcare/Health Information Services) - SQUEEZE PLAY. Traders are feeling the pressure as SDGR's intra-day price range on Tuesday shrunk to the narrowest spread in over a week. The tension between buyers and sellers should provide enough pent-up engergy for a breakout move in the days ahead, so get ready to trade with the new trend. To achieve that, place a BUY entry at 24.33 and a SELL short entry at 22.67. SDGR's price movement will decide which entry is filled. As soon as you're in the trade, enter a 1.66 trailing stop. Tighten it to 0.83 after you get a 2.24 gain. SDGR closed Tuesday at 23.61. Earnings Report Date: Feb 28, 2023. Beta: 0.89. Market-Cap: 1.682B. Optionable.
Verona Pharma plc (VRNA: Healthcare/Biotechnology) - SQUEEZE PLAY. A look at VRNA'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 24.52 and a SELL short trigger at 22.72. Once VRNA shows which way it's headed, place your triggered entry order. As soon as your order is filled, follow with a trailing stop of 1.8 and tighten to 0.9 on a 4.46 gain. VRNA closed Tuesday at 23.69. Earnings Report Date: N/A. Beta: 0.14. Market-Cap: 1.791B. Optionable.
TECHNOLOGY SECTOR
Intapp, Inc. (INTA: Technology/Software-Application) - BULLISH BOUNCE. INTA's positive weekly uptrend is still intact despite recent selling that has driven share prices lower. Price action on Tuesday shows that traders are aware of the moving average support zone now in play, and they are ready to consider buying again. A shift up from this point will attract even more buyers. The new buying should move INTA back in step with the bullish weekly trend, so our BUY entry trigger is set at 27.59. Once you hold a position, trail a stop of 2.48. Tighten it to 1.24 on a 1.74 gain. INTA closed at 27.16 on Tuesday. Earnings Report Date: N/A. Beta: N/A. Market-Cap: 1.711B. 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
---------------- ------- -------- ------- ------ -------
Copart CPRT 11/4/2022 11/4/2022 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