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January 26, 2023 - The RightLine Report
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NOTES FROM THE EDITOR
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Rightline delivers a simple formula for winning in the market: optimal trade selection combined with rock-solid risk management. While these two factors are closely related, they each represent a different mindset.
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"QUICK LIST"
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Stock 01/26 01/26 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
------ -------- -------- -------- -------- --------------- --------
LOVE 25.77 0.11 26.54 24.55 1.99/1 2.58
SRDX 26.35 -0.29 27.32 25.32 2/1 3.2
INBX 26.80 0.20 27.27 25.49 1.78/0.89 3.36
CYRX 22.50 0.37 22.97 21.38 1.59/0.8 2.18
INTA 29.08 0.17 29.56 27.77 1.79/0.9 1.9
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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US stocks were higher on Thursday following a healthy round of economic and earnings data. In equity news, electric automaker Tesla (TSLA $158) outperformed quarterly earnings estimates and presented positive guidance, while International Business Machines (IBM $133) also topped expectations. In other news, Chevron (CVX $187) upped its dividend and announced a new $75-billion stock buyback plan, while Dow Corp (DOW $58) fell short of analysts' predictions. Oil prices were up, treasury yields were mostly higher, gold was down, and the USD/dollar finished the session in a mixed fashion. Jan 25, 2023 Jan 26, 2023
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Dow 33,743.84 9.88 33,949.41 205.57
Nasdaq 11,313.36 -20.91 11,512.41 199.06
S&P 500 4,016.22 -0.73 4,060.43 44.21
NYSE Volume 3.73B 3.83B
NYSE Advancers 1,656 2,116
NYSE Decliners 1,399 961
Nasdaq Volume 5.52B 5.77B
Nasdaq Advancers 2,460 2,717
Nasdaq Decliners 2,084 1,851
New Highs/Lows
01/19 01/20 01/23 01/24 01/25 01/26
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NYSE New Highs 40 47 86 98 70 117
NYSE New Lows 18 16 8 25 13 11
Nasdaq New Highs 72 86 116 113 97 124
Nasdaq New Lows 35 28 35 35 43 42
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TRADER'S TIP:
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TRADER'S TIP: "Know WHY To Buy or Sell" Studies show that most investors buy and sell on emotion instead of reasoning. For example most investors will sell their winning positions to make up for losers, then hold the losers way too long in hopes they will recover. This is the opposite of what should be done, for the winners tend to keep on winning, while losers usually keep losing. The most common management strategy used by successful traders is pretty simple. Get rid of losers quickly, and keep winners profitable with an exit strategy that includes stop orders. It isn't that difficult to understand intellectually how this approach pays off, but sticking with it is too much of an emotional challenge for most people. The solution comes from the discipline gained through repetitive conditioning. "Repetitive conditioning?" That's selling any and all losing positions immediately upon their reaching a predetermined level, and holding any and all winners until they meet the specific sell criteria of your exit strategy. Just another term for "good experience!" **************************
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 - 4060.43 January 26, 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 https://www.prorightline.com/rlch/012623SPX.jpg--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" 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: "Switching Emotions" Most of us are motivated by a variety of emotions that can be roughly grouped under two headings - hope and fear. For example, when the average investor is caught in a losing position, they usually do nothing other than hope that each day will be the last that the stock goes down. As a result, they end up losing more than if they had not "hoped" as much. On the other hand, when someone holds a winning position, they usually become fearful that the next session will take away their profits, so they get out the trade too soon. In effect, fear keeps them from making as much as they should. Successful traders know how to reverse their emotions in these circumstances - to use fear when most people would hope, and use hope when most people would fear. It's much more profitable to fear that our losses will grow bigger, and hope that our profits will grow bigger. Research shows that this lesson can be difficult to accept, because it goes against human nature and is the complete opposite of what most people would do. However uncomfortable it may feel when you first attempt it, this simple reversal of emotions during normal trading situations is a valuable "brain tool" that will help you make wise decisions - sell losing positions and hold on to winners! ***********************************
STOCKS COVERED IN THIS ISSUE
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CONSUMER CYCLICAL SECTOR The Lovesac Company (LOVE: Consumer Cyclical/Furnishings, Fixtures & Appliances) - SQUEEZE PLAY. The ticker for Thursday's session shows LOVE 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 26.54 and a SELL short trigger at 24.55. When LOVE 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 1.99 trailing stop. Upon reaching a 2.58 profit, resize the stop to 1. Earnings Report Date: Mar 27, 2023. Beta: 2.45. Market-Cap: 391.508M. Optionable. HEALTHCARE SECTOR Surmodics, Inc. (SRDX: Healthcare/Medical Devices) - SQUEEZE PLAY. SRDX 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 27.32 and a SELL short entry at 25.32. Once your trade is filled, enter a 2 trailing stop. Tighten it to 1 after a 3.2 gain. SRDX closed on Thursday at 26.35. Earnings Report Date: Feb 06, 2023. Beta: 0.97. Market-Cap: 372.217M. Optionable. Inhibrx, Inc. (INBX: Healthcare/Biotechnology) - SQUEEZE PLAY. Traders are feeling the pressure as INBX'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 27.27 and a SELL short entry at 25.49. INBX's price movement will decide which entry is filled. As soon as you're in the trade, enter a 1.78 trailing stop. Tighten it to 0.89 after you get a 3.36 gain. INBX closed Thursday at 26.80. Earnings Report Date: Feb 27, 2023. Beta: 3.11. Market-Cap: 1.167B. Optionable. INDUSTRIALS SECTOR Cryoport, Inc. (CYRX: Industrials/Integrated Freight & Logistics) - SQUEEZE PLAY. Thursday's trading session left CYRX 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 22.97 and your SELL short trigger at 21.38. One of the orders will be triggered by upcoming price action. When your market order is filled, cancel the remaining trigger and enter a 1.59 trailing stop. Once you have a 2.18 profit, reduce the stop to 0.8. Earnings Report Date: Feb 22, 2023. Beta: 1.24. Market-Cap: 1.102B. Optionable. TECHNOLOGY SECTOR Intapp, Inc. (INTA: Technology/Software-Application) - SQUEEZE PLAY. Thursday's narrow price range has created a potentially profitable setup in INTA, 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 29.56 and a SELL short entry at 27.77. Let INTA's price action determine your long or short entry. Once the order is filled, place a 1.79 trailing stop, and tighten it to 0.9 upon getting a 1.9 gain. INTA closed Thursday at 29.08. Earnings Report Date: Feb 06, 2023. Beta: N/A. Market-Cap: 1.832B. 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 ---------------- ------- -------- ------- ------ ------- 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. 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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