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July 12, 2022 - The RightLine Report
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NOTES FROM THE EDITOR
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The market is a lot like the weather ... it does whatever it wants to, regardless of our plans and wishes. Here are a few things to consider when the market weather doesn't quite meet your preferences:
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"QUICK LIST"
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Stock 07/12 07/12 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
------ -------- -------- -------- -------- --------------- --------
SIX 20.79 0.41 21.59 19.64 1.95/0.98 2.96
CVNA 22.07 -0.02 23.2 20.89 2.31/1.16 5.76
RCUS 27.96 0.58 28.41 2.86/1.43 3.2
ZTO 26.30 0.42 26.91 1.82/0.91 0.58
EE 20.10 -0.30 20.8 19.01 1.79/0.9 3.7
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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The top three US stock indices were all lower on Tuesday, as traders showed caution ahead of Wednesday's upcoming key report on consumer prices. On the economic front, small business optimism dropped to its lowest level in 9-years, and the percentage of small businesses who expect conditions to improve during the next six months fell to the lowest level in the history of the survey. In equities, earnings season kicked off with shares of PepsiCo (PEP $170) moving higher after the beverage company topped forecasts and raised its guidance, while Peloton (PTON $9) announced that it will outsource all of its manufacturing. The USD/dollar inched upward, treasuries were higher, pushing yields lower. Gold and oil prices closed out the session lower. Jul 11, 2022 Jul 12, 2022
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Dow 31,173.84 -164.31 30,981.33 -192.51
Nasdaq 11,372.60 -262.71 11,264.73 -107.87
S&P 500 3,854.43 -44.95 3,818.80 -35.63
NYSE Volume 3.48B 3.85B
NYSE Advancers 980 1,429
NYSE Decliners 2,232 1,773
Nasdaq Volume 4.35B 4.31B
Nasdaq Advancers 1,198 2,043
Nasdaq Decliners 3,380 2,454
New Highs/Lows
07/05 07/06 07/07 07/08 07/11 07/12
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NYSE New Highs 4 12 11 7 5 10
NYSE New Lows 313 182 59 56 132 158
Nasdaq New Highs 20 25 24 27 23 23
Nasdaq New Lows 477 209 118 83 182 211
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TRADER'S TIP:
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TRADER'S TIP: "Price Action Near Support & Resistance Lines" It pays to watch support and resistance lines for potential trade setups. One of the best low-risk buy signals takes place when price dips below a significant support line, and then comes back up and closes above it. In the same fashion, a good shorting opportunity is usually provided when price rises marginally above a resistance line, then reverses to close below it. **************************
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 - 3818.80 July 12, 2022 52-Week High: 4818.62 52-Week Low: 3636.85 Daily Trend: UP Weekly trend: DOWN Weekly Pivot Levels Resistance 3: 4206.19 Resistance 2: 4029.75 Resistance 1: 3964.56 Pivot: 3853.31 Support 1: 3788.12 Support 2: 3676.87 Support 3: 3500.43 https://www.prorightline.com/rlch/071222SPX.jpg--ECONOMIC REPORTS AND EVENTS (all times are Eastern): Monday, July 11, 2022: 11-Jul 11 am 3-year inflation expectations Tuesday, July 12, 2022: 12-Jul 6 am NFIB small-business index Wednesday, July 13, 2022: 13-Jul 8:30 am Consumer price index (monthly) 13-Jul 8:30 am Core CPI (monthly) 13-Jul 8:30 am CPI (year-over-year) 13-Jul 8:30 am Core CPI (year-over-year) 13-Jul 2 pm Beige book 13-Jul 2 pm Federal budget (comparison vs. year-ago) Thursday, July 14, 2022: 14-Jul 8:30 am Producer price index final demand (monthly) 14-Jul 8:30 am Initial jobless claims 14-Jul 8:30 am Continuing jobless claims Friday, July 15, 2022: 15-Jul 8:30 am Retail sales 15-Jul 8:30 am Retail sales excluding vehicles 15-Jul 8:30 am Import price index 15-Jul 8:30 am Empire state manufacturing index 15-Jul 9:15 am Industrial production index 15-Jul 9:15 am Capacity utilization 15-Jul 10 am UMich consumer sentiment index (preliminary) 15-Jul 10 am UMich 5-year inflation expectations (preliminary) 15-Jul 10 am Business inventories 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: "The Buy and Hold Myth" Most long-term investors like to believe they are unaffected by short- term price fluctuations in the market. However, since most buy-and- hold advocates have no Exit Plan or Risk Control Strategy to protect capital and profits, the emotions of fear and pain eventually come to bear, often forcing unprepared investors to sell under the worst conditions. ***********************************
STOCKS COVERED IN THIS ISSUE
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CONSUMER CYCLICAL SECTOR Six Flags Entertainment Corporation (SIX: Consumer Cyclical/Leisure) - SQUEEZE PLAY. In certain stocks a tightly constricted price range is a sign that neither bulls nor bears are confident of winning in the near term. This often means that the side that gives up first causes a quick move in the opposite direction. In these fear dominated skirmishes, opposing traders always benefit from the retreat. In the Squeeze Play setup you can actually play both sides of the inevitable surge. SIX traders reached this state of stand-off on Tuesday with the tightest range of the past seven days. You can take advantage of their efforts by placing a low risk BUY trigger at 21.59 and a SELL short trigger at 19.64. After one of the two orders is filled, cancel the un-triggered order and place a trailing stop at 1.95 which can be tightened to 0.98 on a 2.96 gain. SIX closed Tuesday at 20.79. Earnings Report Date: Aug 11, 2022. Beta: 2.28. Market-Cap: 1.797B. Optionable. Carvana Co. (CVNA: Consumer Cyclical/Internet Retail) - SQUEEZE PLAY. CVNA traders on both sides of the fence are now locked in a head-to-head shootout. Tuesday's price range was the narrowest in over a week, as neither Bears or Bulls have been able to clearly gain the upper hand. This gives us an opportunity to catch the next directional move with little risk of loss. To do this we'll place both a long and a short trigger with a BUY at 23.2 and a SELL short trigger at 20.89. When one of the orders is filled, cancel the remaining order and enter a 2.31 trailing stop. When you've reached a 5.76 paper profit, tighten the stop to 1.16. CVNA closed at 22.07 on Tuesday. Earnings Report Date: Aug 03, 2022. Beta: 2.64. Market-Cap: 3.92B. Optionable. HEALTHCARE SECTOR Arcus Biosciences, Inc. (RCUS: Healthcare/Biotechnology) - BULLISH BOUNCE. Looking a bit frayed after sliding downhill in recent sessions, on Tuesday RCUS seemed intent on initiating a rebound. With moving average support nearby, RCUS 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 28.41. Manage risk with a 2.86 stop. Tighten your stop to 1.43 when you have a 3.2 profit. RCUS ended the day at 27.96. Earnings Report Date: Aug 03, 2022. Beta: 0.73. Market-Cap: 2.005B. Optionable. INDUSTRIALS SECTOR ZTO Express (ZTO: Industrials/Integrated Freight & Logistics) - BULLISH BOUNCE. The charts for ZTO 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 26.91, and follow your entry with a trailing stop of 1.82. Tighten it to 0.91 when a 0.58 profit is reached. ZTO ended the latest session at 26.30. Earnings Report Date: Aug 16, 2022. Beta: -0.01. Market-Cap: 21.296B. Optionable. UTILITIES SECTOR Excelerate Energy, Inc. (EE: Utilities/Utilities-Renewable) - SQUEEZE PLAY. The struggle between buyers and sellers has resulted in EE's narrowest trading range of the past seven sessions. With neither group able to take complete control on Tuesday, the stock's short term destiny is up for grabs. You can capitalize on this unusually tight condition by placing both a BUY order at 20.8 and a SELL order at 19.01. Regardless of which order is triggered, cancel the other one and follow your entry with a 1.79 trailing stop. Tighten the stop to 0.9 once you have a 3.7 gain. EE closed Tuesday at 20.10. Earnings Report Date: N/A. Beta: N/A. Market-Cap: 2.176B. 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 ---------------- ------- -------- ------- ------ ------- Gamestop GME 7/7/2022 7/22/2022 4-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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