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July 2, 2024 - The RightLine Report
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NOTES FROM THE EDITOR
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Our confidence as traders isn't based on our forecasting skills, it's found in our ability to respond appropriately to any and all market conditions. We focus on using adaptive trading methods that produce profits in whatever environment the market creates.
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"QUICK LIST"
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Stock 07/02 07/02 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
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RCL 156.61 0.14 159.79 9.56/4.78 7.42
LKNCY 21.18 -0.23 22.14 20.37 1.77/0.89 2.26
ISRG 438.81 2.57 445.41 26.31/13.16 17.6
LLY 906.71 -7.66 923.97 72.13/36.07 35.14
BEAM 22.57 -0.48 23.3 21.57 1.73/0.87 2.6
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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Stocks ended higher on Tuesday, with the S&P 500 climbing 0.6%, while the Nasdaq, heavily weighted with technology stocks, outpaced gains with a rise of 0.8%. Today's rally was spurred by a stronger-than-expected JOLTS job-openings report, indicating robust labor demand despite recent cooling trends. Most sectors of the S&P 500 saw gains, led by consumer discretionary and financials, each rising over 1%. Tesla's shares surged over 10% following second-quarter vehicle delivery figures that surpassed expectations. In global markets, Asian stocks closed higher, led by Japan's Nikkei 225 Index gaining over 1%, while European markets retreated due to a eurozone inflation report showing core inflation slightly above forecasts for June. Bond yields paused after recent gains, with the 10-year Treasury yield easing to 4.43%. Looking ahead, market focus will remain on labor-market data with the ADP payrolls report due tomorrow and the nonfarm-payrolls report on Friday. The release of May's JOLTS job openings provided insight into the labor market, reporting 8.1 million job openings, surpassing expectations and slightly up from 7.9 million previously. Despite a decline from the peak of over 12 million in March 2022, job openings remain above the 10-year average of approximately 7.4 million. This gradual decline indicates a normalization of labor supply and demand imbalances from historically tight conditions. We anticipate further easing in labor-market conditions in the coming months, supporting consumer spending and extending economic expansion. In review, stocks surged in the first half of 2024, driven by robust performances in mega-cap technology stocks. The S&P 500 advanced over 15%, bolstered by strong showings in the information technology and communication services sectors, each rising more than 26%. The ongoing optimism surrounding artificial intelligence growth potential and robust corporate profits fueled these gains. In contrast, small-cap and mid-cap stocks posted more modest increases, with small-caps up 1.7% and mid-caps up 5%. International developed large-cap and emerging-market stocks saw gains exceeding 5%, bolstered by improved economic growth in Europe and strong corporate earnings in Japan. On the fixed-income side, higher yields led to a 0.7% decline in US investment-grade bonds, while emerging-market debt and US high-yield bonds gained over 2%, supported by ongoing economic momentum. Jul 1, 2024 Jul 2, 2024
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Dow 39,169.52 50.66 39,331.85 162.33
Nasdaq 17,879.30 146.70 18,028.76 149.46
S&P 500 5,475.09 14.61 5,509.01 33.92
NYSE Volume 3.5B 3.33B
NYSE Advancers 905 1,843
NYSE Decliners 1,891 958
Nasdaq Volume 5.21B 4.54B
Nasdaq Advancers 1,603 2,158
Nasdaq Decliners 2,608 2,053
New Highs/Lows
06/25 06/26 06/27 06/28 07/01 07/02
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NYSE New Highs 59 48 80 134 72 65
NYSE New Lows 60 62 46 43 58 64
Nasdaq New Highs 68 68 73 104 58 63
Nasdaq New Lows 198 183 127 155 175 210
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TRADER'S TIP:
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TRADER'S TIP: "Nay-Sayers and Hay-Makers" It seems that practically every market turn comes draped in commentary and analysis from all angles of pundits and prophets. For every pullback there's the requisite reasoning for a "golden buying opportunity," which comes equally weighted with the seemingly sound logic of numerous warning signs signaling impending doom. Enough already! Once in a while try turning down the volume and simply observing the charts and figures that come across without the rhetoric. It can be so much more informative. **************************
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/ https://www.prorightline.com/rlch/070224SPX.jpg--ECONOMIC REPORTS AND EVENTS (all times are Eastern): MONDAY, JULY 1 9:45 am S&P final U.S. manufacturing PMI 10:00 am Construction spending 10:00 am ISM manufacturing TUESDAY, JULY 2 TBA Auto sales June 10:00 am Job openings May WEDNESDAY, JULY 3 8:15 am ADP employment 8:30 am Initial jobless claims 8:30 am U.S. trade deficit 9:45 am S&P final U.S. services PMI 10:00 am Factory orders 10:00 am ISM services 2:00 pm Minutes of Fed's June FOMC meeting THURSDAY, JULY 4 None scheduled, July 4 holiday FRIDAY, JULY 5 8:30 am U.S. employment report 8:30 am U.S. unemployment rate 8:30 am U.S. hourly wages 8:30 am Hourly wages year over year 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: "Setting Stops" Sometimes you'll notice that we include irregular numbers - like 1.02, or 2.56 - in the Initial or Trailing Stop section of our Quick List. There is a calculated reason for this. Market makers - better known by their brokerage firm names - will often manipulate prices to just above or below the daily highs and lows to generate order flow and broker commissions. One key to successful stop placement is to avoid getting swept by market makers in these artificial price moves. A penny or two beyond the usual stop amounts (0.10, .25, .50, etc) will often keep the trade alive. This is because market makers know that many traders with long positions will set stops at ten cents, a quarter, or fifty cents beyond the daily range levels. ***********************************
STOCKS COVERED IN THIS ISSUE
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CONSUMER CYCLICAL SECTOR Royal Caribbean Cruises Ltd. (RCL: Consumer Cyclical/Travel Services) - NEW HIGH DIP. RCL's latest 52-week high and subsequent pullback has resulted in one of our favorite trade opportunities. An encounter with support on Tuesday sets the stage for a low-risk entry. Now watch for RCL to move up to our BUY trigger at 159.79. Once triggered, place your market order. When the order is filled, follow with a trailing stop of 9.56. Tighten the stop to 4.78 when you have a 7.42-point gain. RCL last closed at 156.61. Earnings Report Date: Jul 25, 2024. Beta: 2.57. Market-Cap: 40.303B. Optionable. Luckin Coffee Inc. (LKNCY: Consumer Cyclical/Restaurants) - SQUEEZE PLAY. Traders are feeling the pressure as LKNCY's intra-day price range on Tuesday shrunk to the narrowest spread in over a week. The tension between buyers and sellers should provide enough pent-up engergy for a breakout move in the days ahead, so get ready to trade with the new trend. To achieve that, place a BUY entry at 22.14 and a SELL short entry at 20.37. LKNCY's price movement will decide which entry is filled. As soon as you're in the trade, enter a 1.77 trailing stop. Tighten it to 0.89 after you get a 2.26 gain. LKNCY closed Tuesday at 21.18. Earnings Report Date: Jul 30, 2024. Beta: -0.52. Market-Cap: 5.948B. Optionable. HEALTHCARE SECTOR Intuitive Surgical, Inc. (ISRG: Healthcare/Medical Instruments & Supplies) - NEW HIGH DIP. Basking in the light of a recent new 52-week high, ISRG shares have pulled back a bit as traders enjoy some nice profits. Now it looks like the Bull may be ready to resume the uptrend again. Tuesday's bounce from a Moving Average support zone provides us with solid setup, so be ready to enter when price reaches our BUY trigger at 445.41. Follow your long entry with a 26.31 stop, then tighten it to 13.16 after gaining 17.6. ISRG ended the Tuesday session at 438.81. Earnings Report Date: Jul 18, 2024. Beta: 1.39. Market-Cap: 155.649B. Optionable. Eli Lilly and Company (LLY: Healthcare/Drug Manufacturers - General) - NEW HIGH DIP. You know a stock is performing well when it sets a new 52-week high. Such is the case with LLY, which recently entered new-high territory before dipping lower the past few sessions. A rebound from Moving Average support on Tuesday indicates LLY may be ready to resume its upward climb. Now sitting at 906.71, a move to 923.97 will trigger a BUY entry. Place a 72.13 trailing stop after entering and tighten it to 36.07 once you've gained 35.14. Earnings Report Date: Aug 8, 2024. Beta: 0.36. Market-Cap: 816.406B. Optionable. Beam Therapeutics Inc. (BEAM: Healthcare/Biotechnology) - SQUEEZE PLAY. Tuesday's narrow price range has created a potentially profitable setup in BEAM, as sellers and buyers find themselves in a near tie for control of price direction. The next short-term trend could go either way, so prepare for a move out of the draw within the next day or so. Set a BUY entry at 23.3 and a SELL short entry at 21.57. Let BEAM's price action determine your long or short entry. Once the order is filled, place a 1.73 trailing stop, and tighten it to 0.87 upon getting a 2.6 gain. BEAM closed Tuesday at 22.57. Earnings Report Date: Aug 6, 2024. Beta: 1.88. Market-Cap: 1.858B. 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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