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.
*********************************** "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" 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/ ***************************** 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 *********************************** TRADER'S TIP: *********************************** 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 ************************** 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 - 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 https://www.prorightline.com/rlch/011723SPX.jpg--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" at this link: https://prorightline.com/index.php/economic-indicator-effects/ *********************************** TRADER'S TIP: *********************************** 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 Schrödinger, 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 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 *********************************** 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 ---------------- ------- -------- ------- ------ ------- Copart CPRT 11/4/2022 11/4/2022 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! ********** If you prefer to receive this report in html with color and graphics, or have any questions, send us an email using our contact form at:https://prorightline.com/index.php/contact-us/ ====================================================================== 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. 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