January 28, 2020 - The RightLine Report 

 
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                      NOTES FROM THE EDITOR
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"Think education is expensive? Try ignorance." RightLine took this bit of wisdom to heart in 1997 and turned it into a company trademark.

Since then we have emphasized a personal trading education as a gateway to financial improvement. Being students of the market, we're always learning. Every day presents new challenges, and within the challenges we find new opportunities. Granted, it does take effort to get an education, yet as the saying goes, it's much less expensive than ignorance.

Unfortunately most investors do "try ignorance" - although unknowingly.

And while some uninformed folks view trading stocks as a type of gambling, their lack of understanding usually keeps them from accessing the most valuable profit-producing tools and training available anywhere.

Trading is an extremely valuable resource for any student of the market, because teaches profit skills efficiently. I know of no better way to compact as much usable experience into such a short period of time.

Once you've learned how to trade, you can apply your skills to any time frame - from minutes to years.

The repetition of strategic planning, entering positions under live conditions, implementing risk control, and managing trades sharpens your abilities faster than most people would ever imagine.

Just remember to be patient with yourself. Learning this craft requires several years to reach a high level of consistent performance - even if you are a fast learner.

Regardless of the way anyone chooses to learn or how they perceive the rise and fall of stock prices, we can be certain that market cycles will continue to repeat themselves. There will be varying degrees of increase and decline between the reversal levels, but the up and down cycles are sure to continue in all time frames.

And since they always do, it follows that if we want to make money in the market, the best role to assume is that of a student. Why? Because this point of view allows us to use the knowledge we accumulate to improve our skills. Students are willing to accept mistakes as part of the learning process and make adjustments along the way.

The knowledge gained in the student role is powerful. It allows us to assign significant value to the experience of the journey as well as the destination. The benefits of doing that are real, and once prepared you can literally name your own price.

Trade well!

Thomas Sutton, Editor 

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                           "QUICK LIST"
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Stock     01/28     01/28      Buy      Short   Trailing Stops     Gain 
Symbol    Price      +/-      Entry     Entry   Initial/Tighten   Amount 
------  --------  --------  --------  --------  ---------------  --------

SIG       26.24      0.50     26.95     24.96        1.99/0.99      2.14
PTON      31.38      0.13     32.07     29.65        2.42/1.21      3.48
PETS      25.13      0.32     25.71     23.94        1.77/0.89      1.36
LSCC      21.20      0.36     21.70     20.23        1.47/0.73      1.60


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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US stocks rebounded on Tuesday to close higher following a round of domestic economic news that included the highest consumer confidence reading since August 2019. Also in the mix was a bigger increase in durable goods orders than predicted, a larger than expected gain in home prices and a positive surge in manufacturing activity. In earnings news, United Technologies (UTX $154) and 3M Company (MMM $166) both announced upbeat results for the fourth quarter, yet unimpressive guidance from 3M put pressure on the stock price. Harley Davidson (HOG $34) and Pfizer (PFE $38) disappointed investers with results that fell short of expectations. Gold and treasuries were lower, the USD/dollar closed near even and oil ended the session higher. 


                       Jan 27, 2020           Jan 28, 2020   
                  --------------------   --------------------
Dow                    28,536  -453.93        28,723  +187.05
Nasdaq                  9,139  -175.60      9,269.68  +130.37
S&P 500                 3,244   -51.84         3,276   +32.61

NYSE Volume                      3.90B                  3.56B
NYSE Advancers                     620                   2018
NYSE Decliners                    2331                    891

Nasdaq Volume                    2.63B                  2.17B
Nasdaq Advancers                   763                   2168
Nasdaq Decliners                  2484                   1003

                                 New Highs/Lows

                   01/21  01/22  01/23  01/24  01/27  01/28
                 --------------------------------------------
NYSE New Highs       259    309    202    238    111    144
NYSE New Lows         27     29     45     63    102     57
Nasdaq New Highs     234    272    145    196     78     85
Nasdaq New Lows       42     39     44     60     96     42


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                              TRADER'S TIP:  
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TRADER'S TIP: "Trading Twenty-four Seven?"

Smart traders pick their spots. You don't have to trade continuously, nor should you. Being prepared for an opportunity means knowing about it in advance, which means staying informed - even when you aren't holding a position. 
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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 - 3276.24 January 28, 2020

52-Week High: 3337.77
52-Week Low: 2648.34
Daily Trend: DOWN
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 3417.40
Resistance 2: 3361.16
Resistance 1: 3328.31
Pivot: 3304.92
Support 1: 3272.07
Support 2: 3248.68
Support 3: 3192.44

http://www.rightline.net/rlch/012820SPX.jpg

NASDAQ Composite - 9269.68 January 28, 2020

52-Week High: 9451.43
52-Week Low: 7011.47
Daily Trend: DOWN
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 9702.92
Resistance 2: 9524.72
Resistance 1: 9419.81
Pivot: 9346.52
Support 1: 9241.61
Support 2: 9168.32
Support 3: 8990.12

Dow Industrials - 28722.85 January 28, 2020

52-Week High: 29373.62
52-Week Low: 24504.04
Daily Trend: DOWN
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 30129.45
Resistance 2: 29599.17
Resistance 1: 29294.45
Pivot: 29068.88
Support 1: 28764.16
Support 2: 28538.59
Support 3: 28008.30

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                             MARKET CALENDAR
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--ECONOMIC REPORTS AND EVENTS (all times are Eastern): 
Monday, January 27, 2020:
27-Jan  10 am   New home sales

Tuesday, January 28, 2020:
NONE

Wednesday, January 29, 2020:
05-Aug  8:30 am   Durable goods orders
05-Aug  8:30 am   Core capital goods orders
05-Aug   9 am   Case-Shiller home prices
05-Aug  10 am   Consumer confidence index
29-Jan  8:30 am   Advance trade in goods
29-Jan  10 am   Pending home sales index
29-Jan   2 pm   FOMC announcement
29-Jan  2:30p;m   Jerome Powell press conference

Thursday, January 30, 2020:
30-Jan  8:30 am   Weekly jobless claims
30-Jan  8:30 am   GDP

Friday, January 31, 2020:
31-Jan  8:30 am   Employment cost index
31-Jan  8:30 am   Personal income
31-Jan  8:30 am   Consumer spending
31-Jan  8:30 am   Core price index
31-Jan  9:45 am   Chicago PMI
31-Jan  10 am   Consumer sentiment index

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: "Hurry, Hurry, Step Right Up!"

Don't pay much attention to all the hype from brokerage analysts or the business media. Brokerage firms usually have more than just a casual interest in stocks they tout, and many times so does the media. 

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                      STOCKS COVERED IN THIS ISSUE    
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CONSUMER CYCLICAL SECTOR

Signet Jewelers Limited (SIG: Consumer Cyclical/Luxury Goods) - SQUEEZE PLAY. SIG is caught in a dilemma. The stock's compressed price range on Tuesday has resulted in a condition comparable to a wound up rubber band. We anticipate that this undecided equity will take off soon, but with the direction still in question we'll let upcoming market action tell us whether to buy shares or sell short. SIG is now at 26.24. We can capture price action either way by placing a BUY trigger at 26.95 and a SELL short trigger at 24.96. Once SIG reveals its direction, enter your triggered order and disregard the other one. As soon as your position is in place, follow up with a trailing stop of 1.99. When you acquire a 2.14 profit, tighten the stop to 0.99. Earnings Report Date: Mar 31, 2020. Beta: 1.10. Market-Cap: 1.374B. Optionable.

Peloton Interactive, Inc. (PTON: Consumer Cyclical/Leisure) - SQUEEZE PLAY. One interesting trait of price volatility is that it cycles back and forth through periods of expansion and contraction. Stocks that have recently seen their daily price range shift from an average or wide range to an extremely contracted state are ideal candidates for expansive price moves. In many cases the next move is relatively fast and covers a sizable amount of territory. To take advantage of these trades we use both a BUY and a SELL entry. This allows us to enter in whichever direction the breakout takes. In PTON's case we will enter a BUY should it reach the 32.07 level, or a SELL short trade if it drops to 29.65. As usual a trailing stop is essential, 2.42 which should be tightened to 1.21 on a 3.48 gain. PTON closed Tuesday at 31.38. Earnings Report Date: Feb 04, 2020. Beta: N/A. Market-Cap: 8.803B. Optionable.

HEALTHCARE SECTOR

PetMed Express, Inc. (PETS: Healthcare/Pharmaceutical Retailers) - SQUEEZE PLAY. When a stock's daily price range contracts to an unusually low point, you can safely assume that in most cases a breakout from that range will result in a nice price move. To capture a portion of this potential movement we have set both a long and a short entry into PETS. A move to the upside will trigger our BUY entry at 25.71, while a drop to 23.94 will trigger our SELL short entry. Follow your position with a 1.77 trailing stop. Tighten the stop to 0.89 once you have a 1.36 gain. PETS closed Tuesday at 25.13. Earnings Report Date: N/A. Beta: 0.62. Market-Cap: 506.772M. Optionable.

TECHNOLOGY SECTOR

Lattice Semiconductor Corporation (LSCC: Technology/Semiconductors) - SQUEEZE PLAY. Tuesday's trading action forced LSCC's daily price range into an abnormally narrow state. This translates into opportunity; for the cyclical nature of price volatility is to shrink extensively, then swell rapidly as shares move in one direction or another. Instead of trying to predict the direction LSCC will take when price volatility begins to increase, we'll set both a BUY (long) and a SELL (short) trigger to get us into the right trade. Be ready to BUY shares at 21.70 if LSCC moves higher, and place your order to SELL short at 20.23 if price declines to that level. As usual follow your entry with a trailing stop, 1.47 should be sufficient. Reduce your stop to 0.73 on a 1.60 gain. LSCC closed Tuesday at 21.20. Earnings Report Date: Feb 09, 2020. Beta: 1.30. Market-Cap: 2.831B. 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  
---------------- -------     --------    -------     ------  -------   

Currently there are no upcoming stock splits on the major US exchanges.

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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