January 2, 2020 - The RightLine Report 

 
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                      NOTES FROM THE EDITOR
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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 

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                           "QUICK LIST"
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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" 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

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                           MARKET SUMMARY
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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


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                              TRADER'S TIP:  
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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. 
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                         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 - 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

http://www.rightline.net/rlch/010220SPX.jpg

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

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                             MARKET CALENDAR
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--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" at this link: http://www.rightline.net/education/economic.html 
 
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                              TRADER'S TIP: 
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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." 

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                      STOCKS COVERED IN THIS ISSUE    
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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 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 

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                           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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