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January 6, 2022 - The RightLine Report
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NOTES FROM THE EDITOR
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Financial media gurus are always willing to give their opinions as to which direction stocks are certain to go. Trouble is, no one knows for sure. Even if they did, there's no way to know which of the hundreds of future-tellers are to be believed.
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"QUICK LIST"
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Stock 01/06 01/06 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
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ONEW 57.09 2.02 57.98 5.73/2.87 4.72
BVH 34.41 0.40 34.98 32.78 2.2/1.1 3.26
EWCZ 28.37 -0.22 29.26 27.17 2.09/1.05 2.66
RLMD 21.35 -0.11 22.2 20.33 1.87/0.94 2.9
XMTR 53.87 2.32 55.24 7.48/3.74 8.12
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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Thursday's choppy trading session ended lower following Wednesday's sell-off triggered by the minutes from the Federal Reserve Bank's December monetary policy meeting. Investors continue to assess the implications of the report, which suggest that the Fed may take a more aggressive tightening approach than previously thought. In equities, Conagra Brands (CAG $34) missed earnings estimates, Walgreens Boots Alliance (WBA $52) outperformed forecasts and raised its guidance, while Constellation Brands (STZ $245) also topped profit estimates but only met analysts' revenue numbers. Economic news included data showing an unexpected updraft in unemployment claims, a slowdown in services sector activity and modestly improved factory orders. Gold, the USD/dollar and oil prices were higher, treasuries were lower, pushing yields to the upside. Jan 5, 2022 Jan 6, 2022
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Dow 36,884.44 84.79 36,236.47 -170.64
Nasdaq 15,493.05 -129.66 15,080.86 -19.31
S&P 500 4,786.42 -7.12 4,696.05 -4.53
NYSE Volume 1.65B 4.3B
NYSE Advancers 1,774 1,873
NYSE Decliners 1,346 1,474
Nasdaq Volume 1.86B 4.75B
Nasdaq Advancers 1,778 2,183
Nasdaq Decliners 2,439 2,488
New Highs/Lows
12/31 01/03 01/04 01/05 01/05 01/06
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NYSE New Highs 131 96 132 132 112 64
NYSE New Lows 42 29 49 118 38 185
Nasdaq New Highs 84 98 148 123 104 90
Nasdaq New Lows 174 86 146 406 138 612
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TRADER'S TIP:
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TRADER'S TIP: "Sometimes You Gotta ..." The fear of "missing out" can cloud a trader's judgment, so be sure to base all buy or sell decisions on careful planning instead of emotional reactions. The market is full of opportunities - there's plenty for everyone. Rushing in can lead to problems, so remember the old saying "sometimes you gotta slow down to go fast!" **************************
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 - 4696.05 January 6, 2022 52-Week High: 4818.62 52-Week Low: 3694.12 Daily Trend: DOWN Weekly trend: UP Weekly Pivot Levels Resistance 3: 4919.58 Resistance 2: 4844.64 Resistance 1: 4805.41 Pivot: 4769.70 Support 1: 4730.46 Support 2: 4694.75 Support 3: 4619.81 https://www.prorightline.com/rlch/010622SPX.jpg--ECONOMIC REPORTS AND EVENTS (all times are Eastern): Thursday, January 06, 2022: 06-Jan 8:30 am Initial jobless claims (regular state program) 06-Jan 8:30 am Continuing jobless claims (regular state program) 06-Jan 8:30 am Trade deficit 06-Jan 10 am ISM services index 06-Jan 10 am Factory orders Friday, January 07, 2022: 07-Jan 8:30 am Nonfarm payrolls 07-Jan 8:30 am Unemployment rate 07-Jan 8:30 am Average hourly earnings 07-Jan 3 pm Consumer credit 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: "Trendlines & Volume" When expanding volume accompanies price action in the direction of a trendline, it confirms the trend. The same is true when volume dries up as prices retreat back to the trendline. However, if volume increases as prices pull back to a trendline, or if volume drops when prices pull away from a trendline, consider it a warning that the trendline may be in trouble. ***********************************
STOCKS COVERED IN THIS ISSUE
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CONSUMER CYCLICAL SECTOR OneWater Marine Inc. (ONEW: Consumer Cyclical/Recreational Vehicles) - NEW HIGH DIP. You know a stock is performing well when it sets a new 52-week high. Such is the case with ONEW, which recently entered new-high territory before dipping lower the past few sessions. A rebound from Moving Average support on Thursday indicates ONEW may be ready to resume its upward climb. Now sitting at 57.09, a move to 57.98 will trigger a BUY entry. Place a 5.73 trailing stop after entering and tighten it to 2.87 once you've gained 4.72. Earnings Report Date: Feb 02, 2022. Beta: N/A. Market-Cap: 768.608M. Not Optionable. Bluegreen Vacations Holding Corporation (BVH: Consumer Cyclical/Resorts & Casinos) - SQUEEZE PLAY. The ticker for Thursday's session shows BVH 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 34.98 and a SELL short trigger at 32.78. When BVH 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 2.2 trailing stop. Upon reaching a 3.26 profit, resize the stop to 1.1. Earnings Report Date: Feb 28, 2022. Beta: 1.83. Market-Cap: 721.062M. Optionable. CONSUMER DEFENSIVE SECTOR European Wax Center, Inc. (EWCZ: Consumer Defensive/Household & Personal Products) - SQUEEZE PLAY. EWCZ shareholders know what it feels like to be squeezed. Thursday'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. EWCZ closed Thursday at 28.37. The plan is to enter in the right direction by placing a BUY trigger at 29.26 and a SELL short trigger at 27.17. Once EWCZ establishes direction, place your triggered order. As soon as you are in the trade, place a trailing stop in the amount of 2.09. After you've collected a 2.66 profit, tighten the stop to 1.05. Earnings Report Date: N/A. Beta: N/A. Market-Cap: 966.617M. Not Optionable. HEALTHCARE SECTOR Relmada Therapeutics, Inc. (RLMD: Healthcare/Biotechnology) - 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. RLMD found itself in this condition on Thursday 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 22.2 and a SELL short trigger at 20.33. When RLMD moves outside of Thursday's range, one of the orders will be filled. Once you hold a position of shares, cancel the unfilled order and place a 1.87 trailing stop. After you've got a 2.9 profit, tighten the stop to 0.94. RLMD closed at 21.35 on Thursday. Earnings Report Date: Mar 21, 2022. Beta: 0.22. Market-Cap: 591.952M. Optionable. INDUSTRIALS SECTOR Xometry, Inc. (XMTR: Industrials/Specialty Industrial Machinery) - BULLISH BOUNCE. Positive price behavior near moving average support on Thursday qualifies XMTR for a Bullish Bounce setup. After several sessions of declining prices, XMTR should soon begin trading in step with its established weekly uptrend. Tell your broker to BUY shares if XMTR moves up to our entry trigger set at 55.24. You can also enter a 7.48 trailing stop, to be replaced with a 3.74 trailing stop when you obtain a 8.12 profit. XMTR closed Thursday at 53.87. Earnings Report Date: N/A. Beta: N/A. Market-Cap: 2.505B. 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 ---------------- ------- -------- ------- ------ ------- Arista Networks ANET 11/1/2021 11/18/2021 4-for-1 Yes 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 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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