January 20, 2022 - The RightLine Report 

 
               **********************************
                      NOTES FROM THE EDITOR
               **********************************

Here's an easy yet extremely effective way to approach the stock market. Instead of worrying about what may or may not happen, spend your time planning what you will do specifically in response to the "one thing" that the market always does.

The job of a trader distills down to a very basic task. Our primary objective is to capture price movement. While trying to predict price direction may seem like the logical first step in capturing movement, it actually overcomplicates the process. Studies show that it is virtually if not literally impossible to consistently predict the direction of price movement. Attempting to do it is usually an unwise investment in time and energy.

Okay, back to the "one thing." The one thing that the market always does can be stated in one word; MOVE. When it comes to the stock market the most important quality is an action - price movement, for it's in the price movement that profits are made.

There are only three specific ways that the market can move. Up, down, or sideways. Instead of trying to predetermine which of these three will occur next, it's much easier to use a strategy that captures movement regardless of direction.

There are a number of methods that work well with this approach, but we won't go into the details of specific setup and entry requirements today. However, we can start to lay the foundation for understanding this strategy by asking ourselves two simple questions within the context of the three possible ways the market can move - "What" and "When."

What and When should always be considered in advance of entering any position to arrive at specific entry and exit instructions for these possible scenarios:

Entries:

a) price goes up

b) price goes down

c) price moves sideways

Exits:

a) the trade moves in your favor,

b) the trade moves against you,

c) the trade doesn't move at all.

"What & When." As far as these two are concerned, details matter. It isn't a good idea to approximate, or wait until you "get there" to decide what to do. Plan ahead, put it in writing, and always include the specific conditions and/or price levels for entries and exits. When using a trailing stop method to lock in gains, make certain that you plan in advance exactly when the trailing stop will be adjusted.

Bottom line: Always ask, "What & When" BEFORE you put money in the market.

Trade well,

~ Thomas Sutton 

                ***********************************
                           "QUICK LIST"
                ***********************************

Stock     01/20     01/20      Buy      Short   Trailing Stops     Gain 
Symbol    Price      +/-      Entry     Entry   Initial/Tighten   Amount 
------  --------  --------  --------  --------  ---------------  --------

BILI      39.33      1.61               37.98        4.31/2.16      6.12
AVID      30.63      0.17     31.97     29.56        2.41/1.21      2.52
PYCR      25.49     -0.12               24.35        2.56/1.28       3.6
LAW       30.79      0.65               29.64        2.84/1.42      5.24
DV        24.72      0.51     25.81     23.74        2.07/1.04      2.98


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
                   *****************************

Stocks were lower on Thursday following the release of mixed economic data that included positive expansion of manufacturing in the Philadelphia region, yet existing home sales declined for the first time in four months and weekly initial jobless claims increased more than predicted. The bearish price action of late reflects trader concerns that the US Fed Bank will become more interest-rate-hike aggressive in the wake of chronic inflationary pressures. In equities, Union Pacific (TRV $165) and Travelers Companies (TRV $165) beat earnings estimates, while airliners United (UAL $43) and American (AAL $17) both announced quarterly losses that were smaller than analysts forecast. Treasuries were mixed, gold and oil prices slipped lower, and the USD/dollar moved higher.


                       Jan 19, 2022           Jan 20, 2022   
                  --------------------   --------------------
Dow                 35,028.65  -339.82     34,715.39  -313.26
Nasdaq              14,340.26  -166.64     14,154.02  -186.23
S&P 500              4,532.76   -44.35      4,482.73   -50.03

NYSE Volume                       4.5B                  4.65B
NYSE Advancers                   1,063                    853
NYSE Decliners                   2,317                  2,503

Nasdaq Volume                    4.65B                  5.07B
Nasdaq Advancers                 1,536                  1,379
Nasdaq Decliners                 3,191                  3,374

                                 New Highs/Lows

                   01/13  01/14  01/17  01/18  01/19  01/20
                 --------------------------------------------
NYSE New Highs       137    101      0     97     50     32
NYSE New Lows        103    199      0    299    312    264
Nasdaq New Highs     113     79      0     89     38     26
Nasdaq New Lows      431    683      0    818    772    682

                   *********************************** 
                              TRADER'S TIP:  
                   ***********************************

TRADER'S TIP: "Invest In Learning"

Someone once said that "Good judgment comes from experience, and experience comes from bad judgment." Humorous, yes, and often true. Just be aware that there is more than one way to benefit from "experience." All of us have learned some things the hard way. This is the most common method of learning - make a mistake, and pay for it. Thankfully, there is a better way - gaining good judgment from the experiences of OTHERS! Learning from the mistakes and successes of other traders is far superior to unintentionally investing in over-priced lessons of our own. 
                      **************************
                         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 - 4482.73 January 20, 2022

52-Week High: 4818.62
52-Week Low: 3694.12
Daily Trend: DOWN
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 4997.82
Resistance 2: 4831.23
Resistance 1: 4747.04
Pivot: 4664.64
Support 1: 4580.45
Support 2: 4498.05
Support 3: 4331.46
https://www.prorightline.com/rlch/012022SPX.jpg

NASDAQ Composite - 14154.02 January 20, 2022

52-Week High: 16212.23
52-Week Low: 12397.05
Daily Trend: DOWN
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 16491.93
Resistance 2: 15703.13
Resistance 1: 15298.44
Pivot: 14914.33
Support 1: 14509.64
Support 2: 14125.53
Support 3: 13336.73


Dow Industrials - 34715.39 January 20, 2022

52-Week High: 36952.65
52-Week Low: 29856.30
Daily Trend: DOWN
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 37769.80
Resistance 2: 36895.83
Resistance 1: 36403.82
Pivot: 36021.86
Support 1: 35529.85
Support 2: 35147.89
Support 3: 34273.92


                       **************************
                             MARKET CALENDAR
                       **************************
--ECONOMIC REPORTS AND EVENTS (all times are Eastern): 
Monday, January 17, 2022:
17-Jan          None scheduled. Martin Luther King Jr. Day

Tuesday, January 18, 2022:
18-Jan  8:30 am   Empire state manufacturing index
18-Jan  10 am   NAHB home builders index

Wednesday, January 19, 2022:
19-Jan  8:30 am   Building permits (SAAR)
19-Jan  8:30 am   Housing starts (SAAR)
19-Jan  8:30 am   Philadelphia Fed manufacturing survey

Thursday, January 20, 2022:
20-Jan  8:30 am   Initial jobless claims (regular state program)
20-Jan  8:30 am   Continuing jobless claims (regular state program)
20-Jan  10 am   Existing home sales (SAAR)

Friday, January 21, 2022:
21-Jan  10 am   Leading economic indicators

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: "Right or Wrong"

Traders who follow trading plans that include risk management are never actually "wrong." If price moves against a position, we just execute the planned stop and move on. Experienced traders don't look at this as being "right" or "wrong" - it's just part of the job of trading. 

                   ***********************************
                      STOCKS COVERED IN THIS ISSUE    
                   ***********************************

COMMUNICATION SERVICES SECTOR

Bilibili Inc. (BILI: Communication Services/Electronic Gaming & Multimedia) - BEARISH U-TURN. The weekly trend for BILI is down, but recent daily price activity has lifted shares upward in what's known as a "counter-trend" bounce. As the name implies, this type of rebound is against the main trend. These bounces tend to revert back to the direction of the main trend - in this case downward - once the bounce reaches significant resistance. This is exactly the situation BILI finds itself in, as Thursday's recoil from moving average resistance presents the beginnings of a possible return to the weekly downtrend. BILI now sits at 39.33 after reaching an intra-day high of 41.74 during the latest session. Place a short-SELL order with your broker if price drops to the 37.98 level. Follow your entry with a trailing stop of 4.31 and tighten to 2.16 on a 6.12 profit. Earnings Report Date: Feb 22, 2022. Beta: 1.19. Market-Cap: 15.06B. Optionable.

Avid Technology, Inc. (AVID: Communication Services/Electronic Gaming & Multimedia) - SQUEEZE PLAY. The ticker for Thursday's session shows AVID is now stuck in a tight price band. With the cyclical contraction and expansion nature of volatility in force, we should see a new period of price expansion in the days ahead. To improve the odds of catching the next directional wave, place a BUY trigger at 31.97 and a SELL short trigger at 29.56. When AVID starts moving out of its narrow range, your order will be triggered. Once you're in the trade, cancel the opposing trigger and set a 2.41 trailing stop. Upon reaching a 2.52 profit, resize the stop to 1.21. Earnings Report Date: Mar 07, 2022. Beta: 1.20. Market-Cap: 1.379B. Optionable.

TECHNOLOGY SECTOR

Paycor HCM, Inc. (PYCR: Technology/Software-Application) - BEARISH U-TURN. Despite the fact that Bears have shown the ability to force PYCR into a painful downtrend, recent bullish action has provided shareholders with some welcome relief. However, the upward reprieve may now be about to end. Thursday's intra-day price reaction near Moving Average resistance signals an increased probability that PYCR will head lower in the near term. PYCR now sits at 25.49. Prepare to sell shares SHORT if the weakening price reaches our trigger at 24.35. Place a 2.56 trailing stop after you enter, then reduce it to 1.28 when you've gained 3.6. Earnings Report Date: Feb 03, 2022. Beta: N/A. Market-Cap: 4.446B. Optionable.

CS Disco, Inc. (LAW: Technology/Software-Application) - BEARISH U-TURN. The weight of LAW's declining weekly trend was lightened recently when shares began to move upward. However, like a swimmer against the tide LAW encountered strong resistance on Thursday. Price action indicates a likely return to the previous downtrend, so plan to short LAW upon reaching our SELL trigger at 29.64. Set a 2.84 trailing stop which can be tightened to 1.42 after you have a 5.24 gain. LAW ended the latest session at 30.79. Earnings Report Date: N/A. Beta: N/A. Market-Cap: 1.774B. Optionable.

DoubleVerify Holdings, Inc. (DV: Technology/Software-Application) - SQUEEZE PLAY. DV shareholders know what it feels like to be squeezed. Thursday's slim price range reveals uncertainty on both sides of the table, a situation which often resolves itself by either Bears or Bulls quickly gaining a clear advantage. The question is "who will win?" Near-term market action tell us whether we should sell short or we should buy shares instead. DV closed Thursday at 24.72. The plan is to enter in the right direction by placing a BUY trigger at 25.81 and a SELL short trigger at 23.74. Once DV establishes direction, place your triggered order. As soon as you are in the trade, place a trailing stop in the amount of 2.07. After you've collected a 2.98 profit, tighten the stop to 1.04. Earnings Report Date: N/A. Beta: N/A. Market-Cap: 3.922B. 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  
---------------- -------     --------    -------     ------  -------   
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

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. 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


To Unsubscribe, send an email to cs@prorightline.com or call 800-737-4518.