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July 13, 2023 - The RightLine Report
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NOTES FROM THE EDITOR
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Swing traders enjoy the luxury of not having to be overly concerned with the market's long-term direction. When holding a position for a few days or a few weeks, the near-term bias is what's important. That's why we implement a technical strategy that focuses on daily shifts on the major stock indexes. Weekly and monthly intervals come into play only when a historical level rears its head.
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"QUICK LIST"
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Stock 07/13 07/13 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
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GME 23.46 0.01 24.29 22.71 1.58/0.79 2.68
SLRN 20.46 -0.12 21.01 19.51 1.5/0.75 3.54
CVLG 44.22 1.00 44.99 3.05/1.53 2.42
ENVX 20.77 0.72 21.17 19.43 1.74/0.87 2.3
NOVA 21.66 0.74 22.17 20.52 1.65/0.83 1.82
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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What a great run for US stocks of late, up a 4th straight day, with the S&P 500 topping the 4,500 level on Thursday for the first time since April 2022. The Nasdaq topped and held above the 14,000-level, also the highest since April 2022, as data showed for a second straight day that inflation moderated in June and came in below consensus estimates. With the latest gains, NYSE breadth has been positive by more than 2-1 for five straight days now as the risk-on mood in stocks surged and the dollar weakened to a 15-month low on inflation data. Big tech stocks continued to charge higher as Amazon advanced on the back of its Prime Day sale, while chipmaker Nvidia also rose to new all-time highs along with the semi-index. All S&P sectors were higher excluding Energy, which is still up 3% on the week. Market momentum remains clearly to the upside this year with Technology up 41% YTD, Communications up 41% as well and Consumer Discretionary up 35%. With inflation data in the rear view mirror, and a 25-bps hike "baked in" to the July FOMC meeting, earnings are the next market catalyst starting with the big banks on Friday and into next week. Late day, big news was that St Louis Fed President and well-known "hawk" James Bullard announced he was stepping down in August, giving stocks another lift. Overall, it was just another wild day adding to a wild week going into an options expiration session next Friday during the Fed Bank quiet period. Jul 12, 2023 Jul 13, 2023
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Dow 34,347.43 86.01 34,395.14 47.71
Nasdaq 13,918.96 158.26 14,138.57 219.61
S&P 500 4,472.16 32.90 4,510.04 37.88
NYSE Volume 3.93B 3.84B
NYSE Advancers 2,137 2,064
NYSE Decliners 817 877
Nasdaq Volume 5.24B 5.19B
Nasdaq Advancers 2,894 2,906
Nasdaq Decliners 1,510 1,521
New Highs/Lows
07/06 07/07 07/10 07/11 07/12 07/13
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NYSE New Highs 29 54 81 148 216 174
NYSE New Lows 34 21 25 9 10 12
Nasdaq New Highs 36 57 73 145 227 275
Nasdaq New Lows 140 67 58 49 52 47
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TRADER'S TIP:
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TRADER'S TIP: "Up or Down?" It doesn't matter which way the market goes as long as long as we keep our opinions about direction from blinding us to the opportunity at hand. Traders can increase profitability in all market conditions by following a few time proven guidelines: 1) Locate the trend, and trade in harmony with it. This dramatically shifts the odds of winning into your favor. 2) Never risk more than 2% on any one trade. 3) Use stops to protect against unplanned losses. 4) Be confident, but keep your ego in check. Respect your emotions; yet don't let them prevent you from following your trading plan while you are in a trade. **************************
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 - 4510.04 July 13, 2023 52-Week High: 4517.38 52-Week Low: 3491.58 Daily Trend: UP Weekly trend: UP Weekly Pivot Levels Resistance 3: 3089.99 Resistance 2: 3018.58 Resistance 1: 1509.29 Pivot: 2947.17 Support 1: 1437.88 Support 2: 2875.76 Support 3: 2804.35 https://www.prorightline.com/rlch/071323SPX.jpg--ECONOMIC REPORTS AND EVENTS (all times are Eastern): Monday, July 10, 2023: 10-Jul 10:00 am Wholesale inventories 10-Jul 10:00 am Fed Vice Chair Michael Barr 10-Jul 11:00 am San Francisco Fed President Mary Daly speaks 10-Jul 11:00 am Cleveland Fed President Mester speaks 10-Jul 3:00 pm Consumer credit Tuesday, July 11, 2023: 11-Jul 6:00 am NFIB optimism index Wednesday, July 12, 2023: 12-Jul 8:30 am Consumer price index 12-Jul 8"30 am Core CPI 12-Jul 8:30 am CPI year over year 12-Jul 8:30 am Core CPI year over year 12-Jul 8:30 am Richmond Fed President Barkin speaks 12-Jul 1:00 pm Atlanta Fed President Bostic speaks 12-Jul 2:00 pm Fed Beige Book Thursday, July 13, 2023: NONE Friday, July 14, 2023: 14-Jul 10:00 am Consumer sentiment 14-Jul 8:30 am Import price index 14-Jul 8:30 am Import price index minus fuel 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: "Concentrate on Execution" "The last thing you should have to worry about during market hours is where the market is going, and whether to be long or short. Your strategy will tell you all of this. You should not be concerned about the news, or even if you are making or losing money. You should not be concerned with analyzing the market, always reserve this for when the market is closed. The only thing you should be doing during market hours is concentrating on effectively executing your strategy. If you can't execute your strategy effectively, there really is no point in trading. There are two sides to trading, strategy development and trading execution. During market hours is when you should concentrate on execution and nothing else." ~ Charlie Wright, Veteran Trader and Hedge Fund Manager ***********************************
STOCKS COVERED IN THIS ISSUE
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CONSUMER CYCLICAL SECTOR GameStop Corp. (GME: Consumer Cyclical/Specialty Retail) - SQUEEZE PLAY. Thursday's trading session left GME 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 24.29 and your SELL short trigger at 22.71. One of the orders will be triggered by upcoming price action. When your market order is filled, cancel the remaining trigger and enter a 1.58 trailing stop. Once you have a 2.68 profit, reduce the stop to 0.79. Earnings Report Date: Sep 05, 2023. Beta: -0.28. Market-Cap: 7.149B. Optionable. HEALTHCARE SECTOR Acelyrin, Inc. (SLRN: 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. SLRN 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 21.01 and a SELL short trigger at 19.51. When SLRN 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 1.5 trailing stop. After you've got a 3.54 profit, tighten the stop to 0.75. SLRN closed at 20.46 on Thursday. Earnings Report Date: N/A. Beta: N/A. Market-Cap: 1.989B. Optionable. INDUSTRIALS SECTOR Covenant Logistics Group, Inc. (CVLG: Industrials/Trucking) - BULLISH BOUNCE. This trader-friendly setup turns repetitive stock behavior into real profits. Based on the tendency for up-trending stocks to drop briefly and then resume the up-trend, the Bullish Bounce places traders into excellent stocks when conditions are primed for more skyward movement. CVLG's current price action near moving average support signals a potential BUY entry at 44.99, followed by a 3.05 trailing stop which can be tightened to 1.53 upon earning 2.42. CVLG closed Thursday at 44.22. Earnings Report Date: Jul 26, 2023. Beta: 1.46. Market-Cap: 571.212M. Optionable. Enovix Corporation (ENVX: Industrials/Electrical Equipment & Parts) - SQUEEZE PLAY. ENVX 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. ENVX closed Thursday at 20.77. The plan is to enter in the right direction by placing a BUY trigger at 21.17 and a SELL short trigger at 19.43. Once ENVX establishes direction, place your triggered order. As soon as you are in the trade, place a trailing stop in the amount of 1.74. After you've collected a 2.3 profit, tighten the stop to 0.87. Earnings Report Date: Jul 26, 2023. Beta: 1.35. Market-Cap: 3.285B. Optionable. TECHNOLOGY SECTOR Sunnova Energy International Inc. (NOVA: Technology/Solar) - SQUEEZE PLAY. The ticker for Thursday's session shows NOVA 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 22.17 and a SELL short trigger at 20.52. When NOVA 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 1.65 trailing stop. Upon reaching a 1.82 profit, resize the stop to 0.83. Earnings Report Date: Jul 26, 2023. Beta: 2.04. Market-Cap: 2.519B. 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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