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January 25, 2022 - The RightLine Report
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NOTES FROM THE EDITOR
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Several years ago an ex floor trader from Chicago gave me some advice that I've found to be extremely valuable. We were discussing the obvious pressures that go along with trading the market, and particularly the sleepless nights that sometimes result when holding large positions in volatile markets.
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"QUICK LIST"
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Stock 01/25 01/25 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
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GOLD 19.49 0.11 19.84 1.28/0.64 0.76
MEOH 44.88 1.04 45.85 4.71/2.36 3
WES 23.62 0.72 24.1 2.36/1.18 1.3
CNQ 50.70 1.41 51.7 4.96/2.48 2.3
AXS 56.08 0.07 57.28 4.73/2.37 2.16
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/
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MARKET SUMMARY
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Stocks were lower on Tuesday as the Fed Bank FOMC - Federal Open Market Committee - kicked off a two-day monetary policy meeting. While this mega-powerful group is not expected to raise interest rates immediately, the possibility that they might make a more aggressive move in an attempt to slow persistent inflationary pressures is the major catalyst in the recent volatility. Economic headlines show regional manufacturing remained in expansion territory, yet dipped more than expected, consumer confidence cooled off more than forecast and November home prices were up more than analysts predicted. Earnings season continues as American Express (AXP $173), 3M (MMM $174), IBM (IBM $136), and Johnson & Johnson (JNJ $168) all released above-par earnings reports. The USD/dollar, gold and oil prices all increased, while treasuries declined, raising yields. Jan 24, 2022 Jan 25, 2022
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Dow 34,364.50 99.13 34,297.73 -66.77
Nasdaq 13,855.13 86.21 13,539.29 -315.83
S&P 500 4,410.13 12.19 4,356.45 -53.68
NYSE Volume 6.93B 5.14B
NYSE Advancers 1,519 1,428
NYSE Decliners 1,966 1,978
Nasdaq Volume 7B 4.99B
Nasdaq Advancers 2,382 1,901
Nasdaq Decliners 2,600 2,897
New Highs/Lows
01/18 01/19 01/20 01/21 01/24 01/25
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NYSE New Highs 97 50 32 8 7 18
NYSE New Lows 299 312 264 525 792 159
Nasdaq New Highs 89 38 26 22 18 25
Nasdaq New Lows 818 772 682 1,316 1,755 280
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TRADER'S TIP:
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TRADER'S TIP: "Mistakes" "The greatest mistake you can make in life is to be continually fearing you will make one." ~ Elbert Hubbard **************************
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: https://prorightline.com/index.php/technical-analyst-section-rightline-report/ S&P 500 - 4356.45 January 25, 2022 52-Week High: 4818.62 52-Week Low: 3694.12 Daily Trend: DOWN Weekly trend: DOWN Weekly Pivot Levels Resistance 3: 5025.78 Resistance 2: 4755.96 Resistance 1: 4576.95 Pivot: 4486.14 Support 1: 4307.13 Support 2: 4216.32 Support 3: 3946.50 https://www.prorightline.com/rlch/012522SPX.jpg--ECONOMIC REPORTS AND EVENTS (all times are Eastern): Monday, January 24, 2022: 24-Jan 9:45 am Markit manufacturing PMI (flash) 24-Jan 9:45 am Markit services PMI (flash) Tuesday, January 25, 2022: 25-Jan 9 am 25-Jan 9 am FHFA national home price index (year-over-year change) 25-Jan 10 am Consumer confidence index Wednesday, January 26, 2022: 26-Jan 8:30 am Advance report on trade in goods 26-Jan 10 am New home sales starts (SAAR) 26-Jan 2 pm FOMC statement 26-Jan 2:30 pm Fed Chair Jerome Powell news conference Thursday, January 27, 2022: 27-Jan 8:30 am Initial jobless claims (regular state program) 27-Jan 8:30 am Continuing jobless claims (regular state program) 27-Jan 8:30 am Gross domestic product (SAAR) 27-Jan 8:30 am Final sales of domestic product (SAAR) 27-Jan 8:30 am Durable goods orders 27-Jan 8:30 am Core capital equipment orders 27-Jan 10 am Pending home sales index Friday, January 28, 2022: 28-Jan 8:30 am Real disposable incomes 28-Jan 8:30 am Real consumer spending 28-Jan 8:30 am PCE inflation (month-to-month change) 28-Jan 8:30 am Core PCE inflation (month-to-month change) 28-Jan 8:30 am PCE inflation (year-over-year change) 28-Jan 8:30 am Core PCE inflation (year-over-year change) 28-Jan 8:30 am Personal income (nominal) 28-Jan 8:30 am Consumer spending (nominal) 28-Jan 8:30 am Employment cost index 28-Jan 10 am UMich consumer sentiment index (final) 28-Jan 10 am UMich 5-year inflation expectations (final) 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/
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TRADER'S TIP:
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TRADER'S TIP: "Monthly Stock Options Expirations" US stock options expire at 11:59AM on the third Saturday of each month. Since most retail traders can't trade options on Saturday, this equates to 4:00pm Eastern Time closing bell. This date changes to the third Thursday at 4:00pm whenever Friday is a holiday. ***********************************
STOCKS COVERED IN THIS ISSUE
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BASIC MATERIALS SECTOR Barrick Gold Corporation (GOLD: Basic Materials/Gold) - BULLISH BOUNCE. GOLD's positive weekly uptrend is still intact despite recent selling that has driven share prices lower. Price action on Tuesday shows that traders are aware of the moving average support zone now in play, and they are ready to consider buying again. A shift up from this point will attract even more buyers. The new buying should move GOLD back in step with the bullish weekly trend, so our BUY entry trigger is set at 19.84. Once you hold a position, trail a stop of 1.28. Tighten it to 0.64 on a 0.76 gain. GOLD closed at 19.49 on Tuesday. Earnings Report Date: Feb 16, 2022. Beta: 0.02. Market-Cap: 34.878B. Optionable. Methanex Corporation (MEOH: Basic Materials/Chemicals) - BULLISH BOUNCE. The charts for MEOH show that despite the downward pressure from sellers recently, the weekly uptrend is still going strong. Buyers showed up again on Tuesday, resulting in the early stages of a rebound that started near moving average support. The resulting Bullish Bounce set-up offers a potential entry point for a long play. Set your trigger to BUY shares at 45.85, and follow your entry with a trailing stop of 4.71. Tighten it to 2.36 when a 3 profit is reached. MEOH ended the latest session at 44.88. Earnings Report Date: Jan 26, 2022. Beta: 2.16. Market-Cap: 3.432B. Optionable. ENERGY SECTOR Western Midstream Partners, LP (WES: Energy/Oil & Gas Midstream) - BULLISH BOUNCE. Positive price behavior near moving average support on Tuesday qualifies WES for a Bullish Bounce setup. After several sessions of declining prices, WES should soon begin trading in step with its established weekly uptrend. Tell your broker to BUY shares if WES moves up to our entry trigger set at 24.1. You can also enter a 2.36 trailing stop, to be replaced with a 1.18 trailing stop when you obtain a 1.3 profit. WES closed Tuesday at 23.62. Earnings Report Date: Feb 23, 2022. Beta: 3.67. Market-Cap: 9.646B. Optionable. Canadian Natural Resources Limited (CNQ: Energy/Oil & Gas E&P) - BULLISH BOUNCE. Looking a bit frayed after sliding downhill in recent sessions, on Tuesday CNQ seemed intent on initiating a rebound. With moving average support nearby, CNQ is at a logical place for Bulls to regroup and extend the familiar uptrend that shareholders have become accustomed to. On continued buying, plan on taking long entries with a BUY at 51.7. Manage risk with a 4.96 stop. Tighten your stop to 2.48 when you have a 2.3 profit. CNQ ended the day at 50.70. Earnings Report Date: Mar 03, 2022. Beta: 2.26. Market-Cap: 60.03B. Optionable. FINANCIAL SERVICES SECTOR AXIS Capital Holdings Limited (AXS: Financial Services/Insurance-Property & Casualty) - BULLISH BOUNCE. Here is another example of a stock in an established uptrend that has recently experienced a counter-trend drop. The sliding price action has now found support near a moving average zone, bouncing upward during Tuesday's session to close at 56.08. Anticipate the rebound to continue, and be ready to buy AXS at 57.28. Follow your entry with a trailing stop of 4.73 which can be tightened to 2.37 on a 2.16 profit. Earnings Report Date: Jan 26, 2022. Beta: 0.99. Market-Cap: 4.754B. 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
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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 ---------------- ------- -------- ------- ------ ------- 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!
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