January 24, 2023 - The RightLine Report
Notes From The Editor
The ability to stay calm and cool when trading is certainly a desirable trait. Most of us have no problem maintaining a relaxed state of mind during a bull market, but what happens when the market is in a downtrend? Obviously our trading attitudes have to be built on something better than just upward market movement.
Trader John Hayden says, "Your goal in creating faith in your trading abilities is to know that you will overcome all obstacles, and that you will eventually become a very profitable trader. It is a matter not of IF you become a profitable trader, but WHEN. It is your faith, and developing a sense of certainty about yourself and your trading ability, that will allow you to learn, research, and apply what you learn to trading. Currently you have a lot of beliefs that involve faith and certainty in your everyday life. You must add trading to this list."
Yes, it's that mind thing again. The stuff between our ears is the most valuable resource we have as traders. Not computers, not programs, not trading systems, not even newsletters. They can all be extremely helpful, but their effect is limited if we neglect our mind.
Most new traders have the potential to become profitable. The main reason many don't is their lack of training in risk control and trade management. As a result, they give up before they reach the point of experience-based confidence. This type of confidence comes from routinely using effective trading methods while carefully building productive attitudes. It compels patience, a willingness to change, and produces consistent intelligent actions.
We take a huge step toward acquiring this brand of confidence when we take full responsibility for our actions. Being responsible allows our beliefs to actually go to work on our behalf. Financial gain is only one of the many benefits of trading. Since money is a by-product of realistic belief in our abilities and behaviors, the primary goal should always be personal growth and development.
Trade well!
~ Thomas Sutton, Editor
Stocks Covered Today Stock Splits
Quick List
Stock 01/25 01/25 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
------ -------- -------- -------- -------- --------------- --------
GME 21.40 -0.26 22.38 20.36 2.02/1.01 2.64
JANX 21.11 0.61 21.61 19.49 2.12/1.06 2.14
IGMS 23.50 -0.55 24.78 22.67 2.11/1.06 2.74
NOVA 20.15 -0.37 20.83 19.05 1.78/0.89 2.18
GDS 23.55 -0.51 24.46 22.46 2/1 3.26
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 more on controlling risk go to the RightLine Risk Control System
For a glossary of terms unique to The RightLine Report go to: Glossary
Questions? Send us an email using our Contact Form.
Stocks Covered Today Stock Splits
Market Summary
The US markets finished in a mixed fashion on Tuesday as earnings season continued rolling ahead. 3M Company (MMM $115) fell short of estimates and announced that it would cut its global workforce by roughly 2,500 jobs, Travelers Companies (TRV $193) and Verizon Communications (VZ $40) delivered profits that were in line with analysts' forcasts, while Johnson & Johnson (JNJ $168) disappointed shareholders with a decline in revenues. Economic headlines offered several data updates, as manufacturing and services PMIs were unexpectedly higher, while manufacturing activity in the Richmond region declined much more than expected. Oil prices and gold moved higher, the USD/dollar and treasury rates shifted lower.
Jan 23, 2023 Jan 24, 2023
-------------------- --------------------
Dow 33,629.56 254.07 33,733.96 104.40
Nasdaq 11,364.41 223.98 11,334.27 -30.14
S&P 500 4,019.81 47.20 4,016.95 -2.86
NYSE Volume 3.98B 3.33B
NYSE Advancers 2,241 1,478
NYSE Decliners 849 1,595
Nasdaq Volume 6.04B 5.73B
Nasdaq Advancers 2,974 2,101
Nasdaq Decliners 1,710 2,457
New Highs/Lows
01/17 01/18 01/19 01/20 01/23 01/24
--------------------------------------------
NYSE New Highs 126 101 40 47 86 98
NYSE New Lows 10 8 18 16 8 25
Nasdaq New Highs 136 115 72 86 116 113
Nasdaq New Lows 23 27 35 28 35 35
Stocks Covered Today Stock Splits
TRADER'S TIP: "Making Decisions Builds Confidence"
Each time we enter or exit a trade we make a decision. Every decision we make causes us to grow - IF we give our experiences the value they deserve. However, if we short-change ourselves for not always making "perfect" choices and view our experiences as "mistakes" our confidence will go down instead of up. Just remember that trading conditions are rarely optimum, and we're always making decisions under less than ideal circumstances. Give yourself a break, knowing that only YOU can set the proper value for each experience you have. Be sure you make the right choice. Build your confidence and never value any trade or other experience as worthless.
The Technical Analyst
For help with this chart, be sure to read "Understanding The Importance Of Support And Resistance"
and "Improve Your Trading With Moving Averages".
S&P 500 - 4016.95 January 24, 2023
52-Week High: 4637.30
52-Week Low: 3491.58
Daily Trend: UP
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 4217.54
Resistance 2: 4087.69
Resistance 1: 4030.15
Pivot: 3957.84
Support 1: 3900.30
Support 2: 3827.99
Support 3: 3698.14
NASDAQ Composite - 11334.27 January 24, 2023
52-Week High: 14646.90
52-Week Low: 10088.83
Daily Trend: UP
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 11893.81
Resistance 2: 11474.97
Resistance 1: 11307.70
Pivot: 11056.13
Support 1: 10888.86
Support 2: 10637.29
Support 3: 10218.45
Dow Industrials - 33733.96 January 24, 2023
52-Week High: 35824.28
52-Week Low: 28660.94
Daily Trend: DOWN
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 36342.49
Resistance 2: 34949.04
Resistance 1: 34162.26
Pivot: 33555.60
Support 1: 32768.82
Support 2: 32162.15
Support 3: 30768.70
Stocks Covered Today Stock Splits
Market Calendar
ECONOMIC REPORTS AND EVENTS (all times are Eastern): Monday, January 23, 2023: 23-Jan 10 am Leading economic indicators Tuesday, January 24, 2023: 24-Jan 9:45 am 24-Jan 9:45 am Wednesday, January 25, 2023: 25-Jan None scheduled Thursday, January 26, 2023: 26-Jan 8:30 am Initial jobless claims 26-Jan 8:30 am Continuing jobless claims 26-Jan 8:30 am Real gross domestic product, first estimate (SAAR) 26-Jan 8:30 am Real final sales to domestic purchasers, first estimate (SAAR) 26-Jan 8:30 am Trade in goods (advance) 26-Jan 8:30 am Durable goods orders 26-Jan 8:30 am Core capital goods orders 26-Jan 8:30 am Chicago Fed national activity index 26-Jan 10 am New home sales (SAAR) Friday, January 27, 2023: 27-Jan 8:30 am Real disposable incomes (SAAR) 27-Jan 8:30 am Real consumer spending (SAAR) 27-Jan 8:30 am PCE price index 27-Jan 8:30 am Core PCE price index 27-Jan 8:30 am PCE price index, year-over-year 27-Jan 8:30 am Core PCE price index, year-over-year 27-Jan 10 am UMich consumer sentiment index (late) 27-Jan 10 am UMich 1-year inflation expectations (late) 27-Jan 10 am UMich 5-year inflation expectations (late) 27-Jan 10 am Pending home 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: "Time, Risk, and Reward"
Profit is the reward traders get for doing the right things at the right time. The objective is to be in a trade for the least amount of time possible in order to minimize risk, yet long enough to realize the existing profit potential. While risk tends to increase over time, profit potential doesn't. As a result, holding onto a slightly profitable trade for too long raises risk enough to offset any profit potential.
Stocks Covered in This Issue
CONSUMER CYCLICAL SECTOR
GameStop Corp. (GME: Consumer Cyclical/Specialty Retail) - SQUEEZE PLAY. GME traders on both sides of the fence are now locked in a head-to-head shootout. Tuesday's price range was the narrowest in over a week, as neither Bears or Bulls have been able to clearly gain the upper hand. This gives us an opportunity to catch the next directional move with little risk of loss. To do this we'll place both a long and a short trigger with a BUY at 22.38 and a SELL short trigger at 20.36. When one of the orders is filled, cancel the remaining order and enter a 2.02 trailing stop. When you've reached a 2.64 paper profit, tighten the stop to 1.01. GME closed at 21.40 on Tuesday. Earnings Report Date: Mar 15, 2023. Beta: -0.07. Market-Cap: 6.518B. Optionable.
HEALTHCARE SECTOR
Janux Therapeutics, Inc. (JANX: Healthcare/Biotechnology) - SQUEEZE PLAY. In certain stocks a tightly constricted price range is a sign that neither bulls nor bears are confident of winning in the near term. This often means that the side that gives up first causes a quick move in the opposite direction. In these fear dominated skirmishes, opposing traders always benefit from the retreat. In the Squeeze Play setup you can actually play both sides of the inevitable surge. JANX traders reached this state of stand-off on Tuesday with the tightest range of the past seven days. You can take advantage of their efforts by placing a low risk BUY trigger at 21.61 and a SELL short trigger at 19.49. After one of the two orders is filled, cancel the un-triggered order and place a trailing stop at 2.12 which can be tightened to 1.06 on a 2.14 gain. JANX closed Tuesday at 21.11. Earnings Report Date: N/A. Beta: N/A. Market-Cap: 879.506M. Optionable.
IGM Biosciences, Inc. (IGMS: Healthcare/Biotechnology) - SQUEEZE PLAY. IGMS shareholders know what it feels like to be squeezed. Tuesday'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. IGMS closed Tuesday at 23.50. The plan is to enter in the right direction by placing a BUY trigger at 24.78 and a SELL short trigger at 22.67. Once IGMS establishes direction, place your triggered order. As soon as you are in the trade, place a trailing stop in the amount of 2.11. After you've collected a 2.74 profit, tighten the stop to 1.06. Earnings Report Date: Mar 27, 2023. Beta: -0.31. Market-Cap: 1.006B. Optionable.
TECHNOLOGY SECTOR
Sunnova Energy International Inc. (NOVA: Technology/Solar) - SQUEEZE PLAY. The struggle between buyers and sellers has resulted in NOVA's narrowest trading range of the past seven sessions. With neither group able to take complete control on Tuesday, the stock's short term destiny is up for grabs. You can capitalize on this unusually tight condition by placing both a BUY order at 20.83 and a SELL order at 19.05. Regardless of which order is triggered, cancel the other one and follow your entry with a 1.78 trailing stop. Tighten the stop to 0.89 once you have a 2.18 gain. NOVA closed Tuesday at 20.15. Earnings Report Date: Feb 21, 2023. Beta: 2.13. Market-Cap: 2.358B. Optionable.
GDS Holdings Limited (GDS: Technology/Information Technology Services) - SQUEEZE PLAY. Sometimes when Bulls and Bears face off in the market arena for a typical day-long battle, there is no clear winner. This is evident when the daily price range contracts to an unusually narrow state. GDS found itself in this condition on Tuesday when neither buyers or sellers were able to push ahead. This setup provides traders a chance to hop on board the next breakout - whether it's to the upside or down - with little risk of loss. To do this place a BUY order at 24.46 and a SELL short trigger at 22.46. When GDS moves outside of Tuesday's range, one of the orders will be filled. Once you hold a position of shares, cancel the unfilled order and place a 2 trailing stop. After you've got a 3.26 profit, tighten the stop to 1. GDS closed at 23.55 on Tuesday. Earnings Report Date: Mar 20, 2023. Beta: 0.64. Market-Cap: 4.488B. 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
---------------- ------- -------- ------- ------ -------
NOTE: The number of stock split announcments goes up during Bull markets,
and goes down during Bear market cycles. There are currently no upcoming
stock splits that meet RightLine's proprietary criteria for split ratio,
trading volume and price action.
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 in the RightLine Member's Area.
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