January 31, 2023 - The RightLine Report
Notes From The Editor
Among the most appealing attributes of trading the stock market is the potential to make an exceptionally good income, and to do it from just about any place you choose. Computer and Internet technology provides access to the markets in ways that could only be imagined twenty years ago. For the first time in history, the financial freedom that was accessible only to an elite group of investors is now within reach of the average person. However, as powerful as this technology has proven to be, anyone who attempts to trade or invest in stocks without the proper training and education is very likely to regret it.
Fortunately there is a route we can all take where the risk is low and the success rate is high. It's a rather humble strategy that prioritizes an understanding of risk control above every other aspect of trading. Some new traders may view it as boring because it's not very glamorous and obviously requires discipline. However, we're not talking about the difficult sort of discipline that's required of professionals in complicated vocations like medicine or engineering. In fact, the discipline here is much easier than that.
In a trading context, discipline simply means that we always include a basic group of essential actions every time we put on a trade - no exceptions. The reason we do this? Because our experience has taught us that traders who consistently use these simple tactics are much more successful than those who don't use them at all or only when they "remember" to.
It's amazing how a simple risk control strategy is often the only difference between winning and losing. You might think that since this one facet of trading is so easy, everyone would just go ahead and do it. But for some reason it's often the small, seemingly insignificant things that challenge traders the most. I know that's true in my case. When I first began trading stocks, it took several big losses and a subscription to the RightLine Report to realize that I wasn't taking the simple steps necessary to protect my trading account.
I also learned that a little bit of denial and procrastination goes a long way.
Trade well,
Thomas Sutton, Editor
Note: You will find more about this important subject in the following articles on our website:
https://prorightline.com/index.php/rightline-risk-control-system/
https://www.rightline.net/education/PlanningaTrade.html
Stocks Covered Today Stock Splits
Quick List
Stock 01/31 01/31 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
------ -------- -------- -------- -------- --------------- --------
DADA 13.01 0.23 13.63 1.61/0.81 2.7
XOM 116.06 2.50 / 0
HES 150.16 -1.61 154.9 145.06 9.84/4.92 8.96
HAE 84.60 0.36 86.17 5.64/2.82 5.38
ITOS 20.90 0.51 21.32 19.72 1.6/0.8 2.1
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 major US stock indexes were higher on Tuesday as the market awaits Wednesday's monetary policy decision from the Federal Reserve Bank. Traders anticipate the Fed downshifting to a 25-basis point rate hike after four consecutive 75-basis point increases in June through November, followed by a 50-basis point increase in December. Economic news included a lower than expected Employment Cost Index, a smaller than anticipated drop in November home prices, an unexpected dip in January consumer confidence, and a manufacturing activity decline in the Chicago region. In the earnings department, Pfizer (PFE $44) topped analysts' forecasts but issued disappointing guidance, UPS (UPS $185) also posted excellent earnings and announced a new quarterly dividend, McDonald's (MCD $267) beat profit estimates, and Caterpillar (CAT $252) fell short of projections due to an unfavorable foreign currency situation. The USD/dollar and treasury yields were higher, oil prices and gold were lower.
Jan 30, 2023 Jan 31, 2023
-------------------- --------------------
Dow 33,717.09 -260.99 34,086.04 368.95
Nasdaq 11,393.81 -227.90 11,584.55 190.74
S&P 500 4,017.77 -52.79 4,076.60 58.83
NYSE Volume 3.82B 4.72B
NYSE Advancers 983 2,636
NYSE Decliners 2,092 478
Nasdaq Volume 5.13B 5.73B
Nasdaq Advancers 1,506 3,495
Nasdaq Decliners 3,120 1,114
New Highs/Lows
01/24 01/25 01/26 01/27 01/30 01/31
--------------------------------------------
NYSE New Highs 98 70 117 115 66 104
NYSE New Lows 25 13 11 6 8 4
Nasdaq New Highs 113 97 124 127 89 138
Nasdaq New Lows 35 43 42 40 20 31
Stocks Covered Today Stock Splits
TRADER'S TIP: "Consistency and Discipline"
. . . He (Richard Dennis) placed classified ads proclaiming 'trader wanted,' he got some 1,000 responses from people eager to learn his methods. He settled on fewer than two dozen novices--among them two professional gamblers and a fantasy-game designer--and after a two-week training program, he gave them money to trade under his firm's auspices. Several went on to become top commodity-fund managers, including Jerry Parker of Chesapeake Capital Corp., who now manages more than US$1 billion. 'It was sink or swim. Sort of an experiment,' recalls Parker, a former accountant. Dennis ran the training, Parker says, 'because he wanted to have a certain chunk of money traded using systematic rules' while he went on and tried out new techniques.
~ Business Week
"The key is consistency and discipline. Almost anybody can come up with a list of rules that are 80% as good as what we taught. What they can't do is give people the confidence to stick to those rules even when things are going bad."
~ Richard Dennis
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 - 4076.60 January 31, 2023
52-Week High: 4637.30
52-Week Low: 3491.58
Daily Trend: UP
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 4328.24
Resistance 2: 4183.09
Resistance 1: 4126.82
Pivot: 4037.94
Support 1: 3981.67
Support 2: 3892.79
Support 3: 3747.64
NASDAQ Composite - 11584.55 January 31, 2023
52-Week High: 14646.90
52-Week Low: 10088.83
Daily Trend: UP
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 12706.34
Resistance 2: 12083.63
Resistance 1: 11852.67
Pivot: 11460.92
Support 1: 11229.96
Support 2: 10838.21
Support 3: 10215.50
Dow Industrials - 34086.04 January 31, 2023
52-Week High: 35824.28
52-Week Low: 28660.94
Daily Trend: UP
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 35587.44
Resistance 2: 34696.32
Resistance 1: 34337.20
Pivot: 33805.20
Support 1: 33446.08
Support 2: 32914.08
Support 3: 32022.96
Stocks Covered Today Stock Splits
Market Calendar
ECONOMIC REPORTS AND EVENTS (all times are Eastern): Monday, January 30, 2023: 30-Jan None scheduled Tuesday, January 31, 2023: 31-Jan 8:30 am Employment cost index 31-Jan 9 am 31-Jan 9 am FHFA home price index (SAAR) 31-Jan 9:45 am Chicago business barometer 31-Jan 10 am Consumer confidence index 31-Jan 10 am Rental vacancy rate Wednesday, February 01, 2023: 01-Feb 8:15 am ADP employment report 01-Feb 9:45 am 01-Feb 10 am ISM manufacturing index 01-Feb 10 am Job openings 01-Feb 10 am Quits 01-Feb 10 am Construction spending 01-Feb 2 pm Federal funds rate 01-Feb 2 pm Federal funds projection 01-Feb 2:30 pm Fed Chair Jerome Powell news conference 01-Feb Varies Motor vehicle sales (SAAR) Thursday, February 02, 2023: 02-Feb 8:30 am Initial jobless claims 02-Feb 8:30 am Continuing jobless claims 02-Feb 8:30 am Productivity, first estimate (SAAR) 02-Feb 8:30 am Unit labor costs, first estimate (SAAR) 02-Feb 10 am Factory orders 02-Feb 8:30 am Core capital goods orders Friday, February 03, 2023: 03-Feb 8:30 am Nonfarm payrolls 03-Feb 8:30 am Unemployment rate 03-Feb 8:30 am Average hourly earnings 03-Feb 8:30 am Labor-force participation rate, 25-54 year-olds 03-Feb 9:45 am 03-Feb 10 am ISM services index 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: "Price Action Near Support And Resistance"
It pays to keep an eye on support and resitance lines. One of the best low-risk buy signals takes place when price dips below a significant support line, then comes back up and closes above it. In the same fashion, an excellent shorting opportunity is provided when price rises marginally above a clear resistance line, then reverses to close below it.
Stocks Covered in This Issue
CONSUMER CYCLICAL SECTOR
Dada Nexus Limited (DADA: Consumer Cyclical/Internet Retail) - NEW HIGH DIP. New highs always reflect stocks that are doing exceptionally well. This is the case with DADA, which has pulled back a bit after setting a new 52-week high just a few days ago. Tuesday's bounce from Moving Average support tells us this stock may be ready to move back up to blue sky territory. DADA now rests at 13.01, and we're anticipating a move up to our BUY trigger at 13.63. Be ready to buy shares at that point and follow your entry with a 1.61 trailing stop. Decrease the stop to 0.81 on a 2.7 gain. Earnings Report Date: Mar 06, 2023. Beta: 0.98. Market-Cap: 3.325B. Optionable.
ENERGY SECTOR
Exxon Mobil Corporation (XOM: Energy/Oil & Gas Integrated) - NEW HIGH DIP. XOM is still showing the bullish strength that gave this stock a new 12-month high just a few days ago. Tuesday's intra-day price action near moving average support tells us that another run to the high-mark may be in the works. Get ready to BUY shares if XOM reaches our trigger price of , and enter a trailing stop. The stop can be resized to once you have a 0 profit. XOM closed Tuesday at 116.06. Earnings Report Date: Jan 31, 2023. Beta: 1.10. Market-Cap: 477.969B. Optionable.
Hess Corporation (HES: Energy/Oil & Gas E&P) - 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 HES. A move to the upside will trigger our BUY entry at 154.9, while a drop to 145.06 will trigger our SELL short entry. Follow your position with a 9.84 trailing stop. Tighten the stop to 4.92 once you have a 8.96 gain. HES closed Tuesday at 150.16. Earnings Report Date: Apr 25, 2023. Beta: 1.58. Market-Cap: 46.296B. Optionable.
HEALTHCARE SECTOR
Haemonetics Corporation (HAE: Healthcare/Medical Instruments & Supplies) - NEW HIGH DIP. Tuesday's price action is telling us that HAE is preparing to move back up to the 52-week high that was set just a few days ago. Our BUY trigger at 86.17 is ready to take advantage of a likely bounce from the current support level. Once your order is filled, enter a trailing stop of 5.64. Resize the stop to 2.82 after you reach a 5.38 profit. Earnings Report Date: Feb 07, 2023. Beta: 0.37. Market-Cap: 4.281B. Optionable.
iTeos Therapeutics, Inc. (ITOS: Healthcare/Biotechnology) - 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 ITOS's case we will enter a BUY should it reach the 21.32 level, or a SELL short trade if it drops to 19.72. As usual a trailing stop is essential, 1.6 which should be tightened to 0.8 on a 2.1 gain. ITOS closed Tuesday at 20.90. Earnings Report Date: Mar 21, 2023. Beta: 1.38. Market-Cap: 743.524M. 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.
Disclaimer
The RightLine Report is an information service for investors and traders. It is not a solicitation nor a recommendation or offer to buy or sell securities. The information provided is obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. The publishers of The RightLine Report are not brokers or financial advisors, and are not acting in any way to influence the purchase or sale of any security. Stock picks, entry points and exit points should be considered an information resource to assist the trader in developing a trading plan and it is the sole responsibility of the reader to conduct his or her own due diligence before executing a trade. Trading securities should be considered speculative with a high degree of volatility and risk.
The publishers of The RightLine Report recommend that anyone trading securities should do so with caution, exercise prudent trading discipline and have a personal risk management strategy in place before doing so. It is possible at this or some subsequent date, the publishers and staff of The Pro Right Line Corp. may own, buy or sell securities presented. The Pro Right Line Corp. is not a financial advisory service. Its publishers, owners or investors, are not liable for any losses or damages, monetary or otherwise, that result from the content of The RightLine Report. Past RightLine Report performance may not be indicative of future performance.
All subscriptions and/or use of the RightLine.net website are subject to RightLine's "Terms of Use" and "Subscriber Terms & Conditions" which are posted at www.rightline.net.
Any REDISTRIBUTION of the above information, without The RightLine's written consent, is STRICTLY PROHIBITED.
Copyright / The Pro Right Line Corporation - All Rights Reserved
Click Here To Unsubscribe