Notes From The Editor

Guess what? Trading doesn't have to be complicated. Learning to make money in stocks isn't all that difficult, and thankfully you don't have to be a rocket scientist to be a successful trader. In fact, folks of average intelligence tend to do better trading stocks than the genius types.

All good trading strategies share the same foundation - Risk Control. You probably already know this. Now ask yourself this question ... Do you always use a risk calculator to determine your position size before you enter a trade?

And how about trade execution? Have you ever ordered the wrong number of shares? Or bought the wrong stock? Have you ever gone short when you meant to go long?

Believe me, you're not alone. After working with hundreds of traders I've come to the conclusion that brains and self-control are not the same thing.

In the real world, a high percentage of "smart" people are extremely undisciplined. They have a hard time following a simple routine, and will do anything to avoid tasks they consider to be monotonous or tedious.

That's too bad, for trading stocks requires a disciplined touch. Just like sports, this game is repetitive. Successful traders do the same things over and over. We're not talking about actions that are extremely hard to do, like a hundred pushups every thirty minutes. Trading is made up of relatively simple tasks, yet the ability to consistently implement each aspect of an effective method makes all the difference in the world.

For example, trade execution is a lot like filling out a personal information form online. Have you ever had to retype simple data - like a credit card or social security card number more than twice to get it right? Reaching the point where you can get it right the first time takes the kind of disciplined practice that makes for a good trader.

This type of self-discipline isn't hard and it certainly isn't complicated. However, I'm not sure if anyone can really teach another person how to do it. Granted, it does help if someone reminds us to "pay attention" from time to time. I suppose that's what I'm doing right now - though I have to admit that it's as good for me to hear it as it is for you.

Trade well,

Thomas Sutton, Editor

The US stock markets will be closed on Friday July 3rd in celebration of Independence Day 4th of July Holiday. RightLine will be closed as well, so the next RightLine Report will be published on Tuesday July 7, 2020. We wish everyone a happy Fourth of July. God Bless the USA!

RightLine Staff

Quick List

    
Stock     07/02     07/02      Buy      Short   Trailing Stops     Gain 
Symbol    Price      +/-      Entry     Entry   Initial/Tighten   Amount 
------  --------  --------  --------  --------  ---------------  --------

GCO       21.31      1.00     22.13     20.04        2.09/1.04      5.54
LAKE      22.58     -0.38     23.55     21.63        1.92/0.96      3.66
NVST      21.40      0.07     22.26     20.63        1.63/0.81      2.48
BCEL      22.71      0.61     23.08     21.34        1.74/0.87      2.96

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 access to the Risk Calculator, go to http://www.rightline.net and login to the Member's area.

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

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Market Summary

Stocks closed higher on Thursday ahead of a long 4th of July Holiday weekend, as bulls responded positively to non-farm payroll data that was stronger than expected. Other economic news included moderate but elevated initial jobless claims along with factory orders numbers below estimates. In equities, Tesla (TSLA $1,209) shares continued their recent surge after the world's most valuable automaker reported deliveries that were higher than predicted for the second quarter. Gold, oil prices and the USD/dollar all moved higher, while treasury yields ended the shortened session near even.

                        Jul 1, 2020            Jul 2, 2020    
                  --------------------   --------------------
Dow                    25,735   -77.91        25,827   +92.39
Nasdaq              10,154.63   +95.86        10,208   +53.00
S&P 500                 3,116   +15.57         3,130   +14.15

NYSE Volume                      4.57B                  4.24B
NYSE Advancers                    1542                   1855
NYSE Decliners                    1442                   1103

Nasdaq Volume                    4.64B                  4.03B
Nasdaq Advancers                  1531                   1863
Nasdaq Decliners                  1825                   1455

                                 New Highs/Lows

                   06/25  06/26  06/29  06/30  07/01  07/02
                 --------------------------------------------
NYSE New Highs        25     35     46     58     50     91
NYSE New Lows         16     13      2      6      2      3
Nasdaq New Highs      74     69     84    102    110    177
Nasdaq New Lows       15     30     21     16     14     11
   

TRADER'S TIP: "Choose Your Viewpoint"

Successful trading is as much mental as physical. One extremely important skill to acquire is the ability to view "negative" experiences in an empowering way. For example, instead of looking at a "bad" trade as a "loser," simply consider it a trade that didn't work out as you would have preferred. The emotional investment you make in each trade accumulates in your "mental account" over the course of your trading career. As with money, when it comes to your state of mind, always invest wisely.

The Technical Analyst

For help with this chart, be sure to read "Understanding The Importance Of Support And Resistance"
and "Boost Your Profits With Moving Averages".

S&P 500 - 3130.01 July 2, 2020

52-Week High: 3393.52
52-Week Low: 2191.86
Daily Trend: UP
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 3356.73
Resistance 2: 3206.46
Resistance 1: 3107.75
Pivot: 3056.19
Support 1: 2957.48
Support 2: 2905.92
Support 3: 2755.65


NASDAQ Composite - 10207.63 July 2, 2020

52-Week High: 10310.36
52-Week Low: 6631.42
Daily Trend: UP
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 10854.94
Resistance 2: 10382.16
Resistance 1: 10069.68
Pivot: 9909.37
Support 1: 9596.90
Support 2: 9436.59
Support 3: 8963.81
        
Dow Industrials - 25827.36 July 2, 2020

52-Week High: 29568.57
52-Week Low: 18213.65
Daily Trend: UP
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 28121.73
Resistance 2: 26777.79
Resistance 1: 25896.67
Pivot: 25433.85
Support 1: 24552.73
Support 2: 24089.91
Support 3: 22745.96
 

Market Calendar

ECONOMIC REPORTS AND EVENTS (all times are Eastern):    

Friday, July 03, 2020
03-Jul Independence Day holiday.  None scheduled.

Monday, July 06, 2020:
9:45 am Markit services PMI (final) June 
10 am ISM nonmanufacturing index June 

Tuesday, July 07, 2020:
10 am Job openings May

Wednesday, July 08, 2020:
3 pm Consumer credit May

Thursday, July 09, 2020:
8:30 am Initial jobless claims  
8:30 am Continuing jobless claims  
10 am Wholesale inventories May 

Friday, July 10, 2020:
8:30 am Producer price index (final demand) June




For a chart of typical Up or Down market reactions to specific major US economic reports 
go to:  Economic Indicator Effects

TRADER'S TIP: "Trading for Instant Wealth"

Looking for a short cut to riches? Join the crowd. Many novice traders catch the "get rich quick" bug, and more than a few resort to questionable tactics in a futile attempt to fulfill their fantasies. One such tactic is known as "St. Pete's Paradox," an old gambling scheme that utilizes a distorted version of a common Black Jack strategy - "doubling down." Here's a simple example of how St. Pete's Paradox works;

You bet $1000 on a coin flip, and if you win you quit with a $1000 gain. If you lose you double your last bet and put $2000 on the result of another flip of the coin. If you win, you quit - but if you lose, you double your bet again - this time to $4000. If you win on the third attempt, you quit with $1000 profit. If you lose, you continue to double the bet until you do win.

The good news is that if you have an unlimited amount of money you will ultimately win. The bad news is that it's unlikely that you have access to an infinite supply of cash, which means you will eventually go bankrupt if you try this extremely risky method. As for the paradox...it may sound strange, but the results don't depend on having a fair coin toss.

Stocks Covered in This Issue

CONSUMER CYCLICAL SECTOR

Genesco Inc. (GCO: Consumer Cyclical/Apparel Retail) - SQUEEZE PLAY. Traders are feeling the pressure as GCO's intra-day price range on Thursday 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 22.13 and a SELL short entry at 20.04. GCO's price movement will decide which entry is filled. As soon as you're in the trade, enter a 2.09 trailing stop. Tighten it to 1.04 after you get a 5.54 gain. GCO closed Thursday at 21.31. Earnings Report Date: Sep 04, 2020. Beta: 1.67. Market-Cap: 312.873M. Optionable.

Lakeland Industries, Inc. (LAKE: Consumer Cyclical/Apparel Manufacturing) - SQUEEZE PLAY. A look at LAKE's daily chart shows what a price squeeze is all about. The constricted high-low daily trading range has produced a setup similar to a tightly coiled spring. Expect price to move sharply soon, with the direction yet to be determined. Let the upcoming market action resolve whether you will buy shares or sell short. To capture a move either way, place a BUY trigger at 23.55 and a SELL short trigger at 21.63. Once LAKE shows which way it's headed, place your triggered entry order. As soon as your order is filled, follow with a trailing stop of 1.92 and tighten to 0.96 on a 3.66 gain. LAKE closed Thursday at 22.58. Earnings Report Date: N/A. Beta: -0.07. Market-Cap: 180.104M. Optionable.

HEALTHCARE SECTOR

Envista Holdings Corporation (NVST: Healthcare/Medical Instruments & Supplies) - SQUEEZE PLAY. Thursday's narrow price range has created a potentially profitable setup in NVST, 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 22.26 and a SELL short entry at 20.63. Let NVST's price action determine your long or short entry. Once the order is filled, place a 1.63 trailing stop, and tighten it to 0.81 upon getting a 2.48 gain. NVST closed Thursday at 21.40. Earnings Report Date: Aug 10, 2020. Beta: N/A. Market-Cap: 3.407B. Optionable.

Atreca, Inc. (BCEL: Healthcare/Biotechnology) - SQUEEZE PLAY. Thursday's trading action forced BCEL's daily price range into an abnormally narrow state. This translates into opportunity; for the cyclical nature of price volatility is to shrink extensively, then swell rapidly as shares move in one direction or another. Instead of trying to predict the direction BCEL will take when price volatility begins to increase, we'll set both a BUY (long) and a SELL (short) trigger to get us into the right trade. Be ready to BUY shares at 23.08 if BCEL moves higher, and place your order to SELL short at 21.34 if price declines to that level. As usual follow your entry with a trailing stop, 1.74 should be sufficient. Reduce your stop to 0.87 on a 2.96 gain. BCEL closed Thursday at 22.71. Earnings Report Date: N/A. Beta: N/A. Market-Cap: 638.948M. Not 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.

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  
---------------- -------     --------    -------     ------  -------   

Currently there are no upcoming stock splits on the major US exchanges.
    

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 to all RightLine subscribers. For access, go to http://www.rightline.net and login to the Member's area.

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