January 2, 2020 - The RightLine Report
Notes From The Editor
Finish The Trade
A trade isn't really over when you close out a position. Along with the profits or loss for each trade comes the opportunity to gain even more from the trading process. This extra value is found in the actual experience and what you can learn from it.
It only takes a few minutes to review a trade. Though most people overlook the importance of this brief examination, the benefits of a simple analysis are huge. This is certainly true both in future profit potential and the positive effect of quickly improving your trading methods.
It's very important to keep a trading journal of some type. You can use something as simple as a plain paper notebook or as sophisticated as a trade management software program. Whichever you choose, here is a short list of questions to include in your trade review ...
How did you choose the stock for your trade?
What were your reasons for buying or going short?
What was the basis for the setup - perhaps a certain pattern, indicator, or moving average?
How did you feel as you placed the order?
Was the order filled close to the actual entry price?
Did you enter a stop?
What were your thoughts as the trade progressed?
How well did the stop work?
Was it too tight or too broad?
How did your exit strategy perform?
What emotions emerged once you closed the trade?
Did you stick with your overall trading plan?
Should you have done anything differently?
A calm analysis of your trades will give you much more than joyful elation from a big winner or disappointment from a loser. Keeping a journal of the "before and after" aspects of your trades will help you learn from the past and improve your methods.
The review process also lets you be more objective about your emotional strengths and weaknesses. Not surprisingly, this type of routine self-assessment will dramatically improve your trading skills, and can be used in other areas of your life as well.
Here's to profits!
~ Thomas Sutton, Editor
Stocks Covered Today...Stock Splits...
Quick List
Stock 01/02 01/02 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
------ -------- -------- -------- -------- --------------- --------
VAC 129.23 0.47 131.48 7.96/3.98 4.06
FTSV 40.00 0.63 40.91 3.40/1.70 6.76
SRPT 129.09 0.05 132.35 123.88 8.47/4.24 9.02
NXTC 55.68 -0.65 56.99 51.79 5.20/2.60 8.48
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 access to the Risk Calculator, go to http://www.rightline.net and login to the Member's area.
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
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Stocks Covered Today...Stock Splits...
Market Summary
All three major indexes recorded solid gains on the first trading day of 2020. Thursday's rally was fueled in part by optimism surrounding the ongoing USA and China trade negotiations, with a phase-one agreement expected to be signed relatively soon. On the equities front, networking equipment maker Anixter International (AXE $95) announced that it has accepted a takeover bid from Clayton, Dubilier & Rice LLC in a deal valued at roughly $4.3 billion. Shares of AXE traded higher. Gold, oil and the USD/dollar also moved higher, treasury yields declined.
Jan 1, 2020 Jan 2, 2020
-------------------- --------------------
Dow CLOSED 0 28,868.80 +330.36
Nasdaq CLOSED 0 9,092.19 +119.58
S&P 500 CLOSED 0 3,258 +27.07
NYSE Volume 0 3.55B
NYSE Advancers 0 1808
NYSE Decliners 0 1147
Nasdaq Volume 0 2.89B
Nasdaq Advancers 0 1890
Nasdaq Decliners 0 1331
New Highs/Lows
12/26 12/27 12/30 12/31 01/01 01/02
--------------------------------------------
NYSE New Highs 175 203 97 103 0 214
NYSE New Lows 7 4 15 9 0 5
Nasdaq New Highs 216 216 114 109 0 265
Nasdaq New Lows 27 29 37 29 0 17
Stocks Covered Today...Stock Splits...
TRADER'S TIP: "Bases Loaded?"
Success rarely comes from over-leveraging your account and putting everything on one or two rolls of the dice. Yes, high-octane homeruns are nice, but steady base hits are less risky and add up over time. Be patient - you'll get your share of points as a result of trading smart.
Take a different route than the crowd by locating low-risk trade setups and applying Risk Control to every position. Disciplined consistency may not be as dramatic as shooting wildly from the hip, but you're much more likely to hit your profit target.
The Technical Analyst
For help with this chart, be sure to read "Understanding The Importance Of Support And Resistance"
and "Boost Your Profits With Moving Averages".
S&P 500 - 3257.85 January 2, 2020
52-Week High: 3258.14
52-Week Low: 2474.33
Daily Trend: DOWN
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 3290.99
Resistance 2: 3263.57
Resistance 1: 3251.79
Pivot: 3236.15
Support 1: 3224.37
Support 2: 3208.73
Support 3: 3181.31
NASDAQ Composite - 9092.19 January 2, 2020
52-Week High: 9093.43
52-Week Low: 6457.13
Daily Trend: DOWN
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 9232.94
Resistance 2: 9115.30
Resistance 1: 9060.96
Pivot: 8997.66
Support 1: 8943.32
Support 2: 8880.02
Support 3: 8762.38
Dow Industrials - 28868.80 January 2, 2020
52-Week High: 28872.80
52-Week Low: 22638.41
Daily Trend: DOWN
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 29032.66
Resistance 2: 28822.78
Resistance 1: 28734.01
Pivot: 28612.90
Support 1: 28524.13
Support 2: 28403.01
Support 3: 28193.13
Stocks Covered Today...Stock Splits...
Market Calendar
ECONOMIC REPORTS AND EVENTS (all times are Eastern):
Monday, December 30, 2019:
30-Dec 8:30 am Advance trade in goods
30-Dec 9:45 am Chicago PMI
30-Dec 10 am Pending home sales
Tuesday, December 31, 2019:
31-Dec 9 am Case-Shllier home price index
31-Dec 10 am Consumer confidence index
Wednesday, January 01, 2020:
None scheduled - Market Closed New Year's Day
Thursday, January 02, 2020:
02-Jan 8:30 am Weekly jobless claims
02-Jan 9:45 am Markit manufacturing PMI
Friday, January 03, 2020:
03-Jan 10 am ISM manufacturing index
03-Jan 10 am Construction spending
03-Jan Varies Motor vehicle sales
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: "How Do You Get To Carnegie Hall?"
We've all heard the answer to this old joke . . . "practice, practice, practice!" While it is certainly obvious that trading successfully requires plenty of it, many investors have yet to apply this ancient bit of oriental wisdom: "Practice is the best of all instructors."
Stocks Covered in This Issue
CONSUMER CYCLICAL SECTOR
Marriott Vacations Worldwide Corporation (VAC: Consumer Cyclical/Resorts & Casinos) - NEW HIGH DIP. "Buy the dip" is usually good advice when applied to an up-trending stock. This is expecially true when a new 52-week high has recently made its mark on the charts. VAC meets the setup requirements, so get ready to BUY if shares reach our trigger price of 131.48. Once you've confirmed that your order is filled, follow it with a 7.96 trailing stop which can be changed to 3.98 when you have a 4.06-point gain. VAC closed Thursday at 129.23. Earnings Report Date: Feb 26, 2020. Beta: 1.73. Market-Cap: 5.4B. Optionable.
HEALTHCARE SECTOR
Forty Seven, Inc. (FTSV: Healthcare/Biotechnology) - BULLISH BOUNCE. FTSV has charted an upward weekly trend until recently when sellers showed up to push prices lower. On Thursday the selling ran into solid support. A potential bounce up from this level should attract buyers and likely return FTSV to the previously established uptrend. The Bullish Bounce set-up is the basis for our BUY entry, so be ready to go long on a rise to our trigger at 40.91. Set a trailing stop of 3.40, tightening to 1.70 on a 6.76 profit. FTSV closed at 40.00 on Thursday. Earnings Report Date: N/A. Beta: N/A. Market-Cap: 1.7B. Optionable.
Sarepta Therapeutics, Inc. (SRPT: Healthcare/Biotechnology) - SQUEEZE PLAY. Traders are feeling the pressure as SRPT's intra-day price range on Thursday 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 132.35 and a SELL short entry at 123.88. SRPT's price movement will decide which entry is filled. As soon as you're in the trade, enter a 8.47 trailing stop. Tighten it to 4.24 after you get a 9.02 gain. SRPT closed Thursday at 129.09. Earnings Report Date: Feb 25, 2020. Beta: 2.24. Market-Cap: 9.6B. Optionable.
NextCure, Inc. (NXTC: Healthcare/Biotechnology) - SQUEEZE PLAY. Thursday's narrow price range has created a potentially profitable setup in NXTC, 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 56.99 and a SELL short entry at 51.79. Let NXTC's price action determine your long or short entry. Once the order is filled, place a 5.20 trailing stop, and tighten it to 2.60 upon getting a 8.48 gain. NXTC closed Thursday at 55.68. Earnings Report Date: N/A. Beta: N/A. Market-Cap: 1.5B. 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
---------------- ------- -------- ------- ------ -------
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
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 to all RightLine subscribers. For access, go to http://www.rightline.net and login to the Member's area.
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