January 23, 2020 - The RightLine Report
Notes From The Editor
Trading stocks successfully is in many ways based on repetitive events. For example, the constant fluctuations in price that create windows of opportunity. It is within this never ending movement - whether up or down - that traders find profits.
One way to access these windows is to anticipate support and resistance levels where prices are most likely to either reverse or accelerate. These critical levels provide reasonably safe entry points. This is because entering positions near support or resistance zones delivers a larger slice of the profit pie when the trade is favorable, and a quick small loss when it isn't.
We often emphasize that before entering a trade you should carefully consider exactly what you will do and when you will do it once you are in the position. This thoughtful consideration is to be done in advance of entering a trade, and in fact is much more important than finding the "perfect" stock or entry.
When evaluating your "what" and "when" course-of-action, always include an exit plan for three possible scenarios. The first is to be used if the trade moves favorably, the second is used if the trade moves unfavorably, and the third is used if it doesn't move at all. Remember that your exit plan is in place BEFORE entering a trade. Pay attention to details and be sure to include the specific exit price when planning your stop-losses.
Also, when using the trailing stop method to lock in gains make certain that you know in advance the exact point you will adjust your trailing stop. Again, it's very important that you write down your exit plan specifics BEFORE you get in.
Here's to profits,
Thomas Sutton, Editor
Stocks Covered Today...Stock Splits...
Quick List
Stock 01/23 01/23 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
------ -------- -------- -------- -------- --------------- --------
INSM 20.22 -0.01 20.78 19.44 1.34/0.67 1.64
AMRN 20.76 -0.06 21.10 19.72 1.38/0.69 1.76
NSTG 29.59 -0.10 30.33 28.33 2.00/1.00 1.78
CUTR 30.53 0.50 31.08 28.68 2.40/1.20 1.98
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" 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
US stocks closed mixed and near even on Thursday following news that the Index of Leading Economic Indicators declined and unemployment claims were up though not as much as expected. On the equities front, shares of Southwest Airlines (LUV $55) and Union Pacific (UNP $187) moved higher after the companies released upbeat quarterly earnings reports, while Procter & Gamble (PG $125) topped profit expectations and raised its guidance but fell short of revenue forecasts. Traders sold shares of PG. Gold and the USD/dollar increased in value, treasury yields and oil prices declined.
Jan 22, 2020 Jan 23, 2020
-------------------- --------------------
Dow 29,186 -9.77 29,160 -26.18
Nasdaq 9,383.77 +12.96 9,402.48 +18.71
S&P 500 3,322 +0.96 3,326 +3.79
NYSE Volume 3.74B 4.08B
NYSE Advancers 1452 1459
NYSE Decliners 1458 1425
Nasdaq Volume 2.54B 2.55B
Nasdaq Advancers 1569 1499
Nasdaq Decliners 1633 1717
New Highs/Lows
01/16 01/17 01/20 01/21 01/22 01/23
--------------------------------------------
NYSE New Highs 298 339 0 259 309 202
NYSE New Lows 6 7 0 27 29 45
Nasdaq New Highs 379 394 0 234 272 145
Nasdaq New Lows 14 16 0 42 39 44
Stocks Covered Today...Stock Splits...
TRADER'S TIP: "Under and Over"
While it's easy to under-estimate how long it takes to learn how to trade well, it's almost impossible to OVER-estimate the value of the lessons learned along the way. Remember that there's no such thing as a bad experience - so long as you learn from it and assign it a high value.
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 - 3325.54 January 23, 2020
52-Week High: 3337.77
52-Week Low: 2624.06
Daily Trend: UP
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 3432.21
Resistance 2: 3370.76
Resistance 1: 3350.19
Pivot: 3309.31
Support 1: 3288.74
Support 2: 3247.85
Support 3: 3186.40
NASDAQ Composite - 9402.48 January 23, 2020
52-Week High: 9439.29
52-Week Low: 7011.47
Daily Trend: UP
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 9726.00
Resistance 2: 9525.58
Resistance 1: 9457.26
Pivot: 9325.16
Support 1: 9256.84
Support 2: 9124.74
Support 3: 8924.32
Dow Industrials - 29160.09 January 23, 2020
52-Week High: 29373.62
52-Week Low: 24323.94
Daily Trend: DOWN
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 30288.76
Resistance 2: 29734.57
Resistance 1: 29541.33
Pivot: 29180.38
Support 1: 28987.14
Support 2: 28626.19
Support 3: 28072.00
Stocks Covered Today...Stock Splits...
Market Calendar
ECONOMIC REPORTS AND EVENTS (all times are Eastern): Monday, January 20, 2020: 20-Jan None scheduled Martin Luther King Jr. Holiday Tuesday, January 21, 2020: 21-Jan None scheduled Wednesday, January 22, 2020: 22-Jan 8:30 am Chicago Fed national index 22-Jan 10 am Existing home sales Thursday, January 23, 2020: 23-Jan 8:30 am Weekly jobless claims 23-Jan 10 am Leading economic indicators Friday, January 24, 2020: 24-Jan 9:45 am Markit manufacturing PMI (flash) 24-Jan 9:45 am Markit services PMI (flash) 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: "Mistakes"
"The greatest mistake you can make in life is to be continually fearing you will make one."
~ Elbert Hubbard
Stocks Covered in This Issue
HEALTHCARE SECTOR
Insmed Incorporated (INSM: Healthcare/Biotechnology) - SQUEEZE PLAY. INSM 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. INSM closed Thursday at 20.22. The plan is to enter in the right direction by placing a BUY trigger at 20.78 and a SELL short trigger at 19.44. Once INSM establishes direction, place your triggered order. As soon as you are in the trade, place a trailing stop in the amount of 1.34. After you've collected a 1.64 profit, tighten the stop to 0.67. Earnings Report Date: Feb 19, 2020. Beta: 3.05. Market-Cap: 1.807B. Optionable.
Amarin Corporation plc (AMRN: Healthcare/Biotechnology) - SQUEEZE PLAY. The ticker for Thursday's session shows AMRN 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 21.10 and a SELL short trigger at 19.72. When AMRN 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 1.38 trailing stop. Upon reaching a 1.76 profit, resize the stop to 0.69. Earnings Report Date: Feb 23, 2020. Beta: 1.05. Market-Cap: 7.451B. Optionable.
NanoString Technologies, Inc. (NSTG: Healthcare/Biotechnology) - SQUEEZE PLAY. Thursday's trading session left NSTG in a very narrow price range after buyers and sellers fought to a near stalemate. Both sides are looking for some traction, and a breakout either way could provide a nice gain in the short term. To get aboard, set your BUY trigger at 30.33 and your SELL short trigger at 28.33. One of the orders will be triggered by upcoming price action. When your market order is filled, cancel the remaining trigger and enter a 2.00 trailing stop. Once you have a 1.78 profit, reduce the stop to 1.00. Earnings Report Date: Mar 04, 2020. Beta: 1.14. Market-Cap: 1.07B. Optionable.
Cutera, Inc. (CUTR: Healthcare/Medical Devices) - SQUEEZE PLAY. CUTR is stuck in a Bull/Bear deadlock. Fortunately for traders this impasse should be resolved soon, with one side or the other taking control. We want to be positioned for a potential quick move up or down, so get ready to catch this train with a BUY entry at 31.08 and a SELL short entry at 28.68. Once your trade is filled, enter a 2.40 trailing stop. Tighten it to 1.20 after a 1.98 gain. CUTR closed on Thursday at 30.53. Earnings Report Date: Feb 17, 2020. Beta: 0.93. Market-Cap: 434.549M. 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
---------------- ------- -------- ------- ------ -------
Currently there are no upcoming stock splits on the major US exchanges.
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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