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July 25, 2024 - The RightLine Report
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NOTES FROM THE EDITOR
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Whipsaw market environments are inherently difficult to trade; their abrupt directional changes seem to come out of nowhere. During these types volatile of markets you can take a few steps to protect your capital - or better yet - reap some profits.
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"QUICK LIST"
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Stock 07/25 07/25 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
------ -------- -------- -------- -------- --------------- --------
JMIA 12.28 0.04 12.94 1.73/0.87 1.66
MARA 20.28 -0.39 21.54 19.31 2.23/1.12 2.44
IMCR 40.15 0.57 40.77 3.29/1.65 2.96
LBPH 35.82 0.32 37.52 3.58/1.79 6.66
NFE 20.34 -0.31 21.18 19.22 1.96/0.98 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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US stocks had a mixed performance on Thursday, showing signs of stabilization after recent declines driven by disappointing earnings from major technology companies and a broader shift away from growth stocks. Despite spending most of the day in positive territory, the S&P 500 closed slightly lower, while the Dow Jones gained 81 points, and small-cap stocks outperformed with a rise of over 1%. Tech stocks continued to struggle, with the Nasdaq falling nearly 1%. Bond prices rose, pushing 10-year Treasury yields down to around 4.25%, while gold prices fell and oil prices increased by 1%. Earnings reports added to the day's volatility, with positive surprises from IBM and Chipotle, but disappointments from Ford and American Airlines weighed on those shares. The latest GDP report indicated that the economy grew by a solid 2.8% in the second quarter, surpassing the consensus estimate of 1.9%. This represents a notable improvement from the previous quarter's 1.4% growth, driven by increased household consumption and a significant rise in investment spending, particularly in equipment. Key takeaways include: - Strong personal consumption suggests consumers are still actively spending. - Emerging softness in the labor market, slower wage growth, and reduced accumulated savings point to potentially slower future spending growth. However, there's no indication that consumer spending will decline sharply enough to trigger a broader GDP downturn. Given the solid labor market, we anticipate that consumer spending will continue to support moderate economic growth for the rest of the year. This growth should reassure the Federal Reserve that the economy does not require immediate monetary support, likely leading to the Fed maintaining current interest rates next week. Nonetheless, expectations for a rate cut in September remain unchanged. On Friday, the PCE (Personal Consumption Expenditures) index, the Fed's preferred inflation measure, will be released. Unless it shows unexpected increases in consumer price pressures, the combination of moderating inflation and strong GDP growth supports the "soft landing" scenario that has been bolstering the equity rally this year. Jul 24, 2024 Jul 25, 2024
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Dow 39,853.87 -504.22 39,935.07 81.20
Nasdaq 17,342.41 -654.94 17,181.72 -160.69
S&P 500 5,427.13 -128.61 5,399.22 -27.91
NYSE Volume 3.95B 4.6B
NYSE Advancers 494 1,848
NYSE Decliners 2,314 937
Nasdaq Volume 6.75B 6.13B
Nasdaq Advancers 998 2,506
Nasdaq Decliners 3,201 1,717
New Highs/Lows
07/18 07/19 07/22 07/23 07/24 07/25
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NYSE New Highs 244 48 100 214 111 178
NYSE New Lows 11 18 21 17 28 29
Nasdaq New Highs 228 56 99 238 167 214
Nasdaq New Lows 65 104 92 89 117 108
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TRADER'S TIP:
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TRADER'S TIP: "Information Overload?" So how do we manage the huge amount of market info and other financial advice being thrown our way every day? We can filter out a lot of the useless information by asking another question; how does this specifically help me to become a more successful trader and investor? Broad generalizations are helpful to an extent, but focusing on exactly what we need can provide the high-octane fuel to accelerate our progress. **************************
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/072524SPX.jpg--ECONOMIC REPORTS AND EVENTS (all times are Eastern): MONDAY, JULY 22 None scheduled TUESDAY, JULY 23 10:00 am Existing home sales June 9:45 am S&P flash U.S. services PMI 9:45 am S&P flash U.S. manufacturing PMI WEDNESDAY, JULY 24 10:00 am New home sales THURSDAY, JULY 25 8:30 am GDP 8:30 am Initial jobless claims 8:30 am Durable-goods orders 8:30 am Durable-goods minus transportation 8:30 am Advanced U.S. trade balance in goods 8:30 am Advanced retail inventories 8:30 am Advanced wholesale inventories FRIDAY, JULY 26 8:30 am Personal income (nominal) 8:30 am Personal spending (nominal) 8:30 am PCE index] 8:30 am PCE (year-over-year) 8:30 am Core PCE index 8:30 am Core PCE (year-over-year) 10:00 am Consumer sentiment (final) 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: "Earnings Conference Calls" Since the SEC implemented the Fair Disclosure laws, most companies have begun allowing individual shareholders to listen in on earnings conference calls that were previously limited to analysts only. If you are tracking a stock as it approaches its scheduled earnings announcement, always look for the related conference call and mark it on your calendar. The behavior of the stock during the call can telegraph early reaction to management's explanation of earnings related events. If you can't find any mention of the call, give the firm's Investor Relations department a ring and ask when or if a call will be held. ***********************************
STOCKS COVERED IN THIS ISSUE
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CONSUMER CYCLICAL SECTOR Jumia Technologies AG (JMIA: Consumer Cyclical/Internet Retail) - NEW HIGH DIP. New highs always reflect stocks that are doing exceptionally well. This is the case with JMIA, which has pulled back a bit after setting a new 52-week high just a few days ago. Thursday's bounce from Moving Average support tells us this stock may be ready to move back up to blue sky territory. JMIA now rests at 12.28, and we're anticipating a move up to our BUY trigger at 12.94. Be ready to buy shares at that point and follow your entry with a 1.73 trailing stop. Decrease the stop to 0.87 on a 1.66 gain. Earnings Report Date: Aug 6, 2024. Beta: 3.02. Market-Cap: 1.255B. Optionable. FINANCIAL SERVICES SECTOR Marathon Digital Holdings, Inc. (MARA: Financial Services/Capital Markets) - SQUEEZE PLAY. MARA is caught in a dilemma. The stock's compressed price range on Thursday has resulted in a condition comparable to a wound up rubber band. We anticipate that this undecided equity will take off soon, but with the direction still in question we'll let upcoming market action tell us whether to buy shares or sell short. MARA is now at 20.28. We can capture price action either way by placing a BUY trigger at 21.54 and a SELL short trigger at 19.31. Once MARA reveals its direction, enter your triggered order and disregard the other one. As soon as your position is in place, follow up with a trailing stop of 2.23. When you acquire a 2.44 profit, tighten the stop to 1.12. Earnings Report Date: Aug 1, 2024. Beta: 5.57. Market-Cap: 5.735B. Optionable. HEALTHCARE SECTOR Immunocore Holdings plc (IMCR: Healthcare/Biotechnology) - BULLISH BOUNCE. Positive price behavior near moving average support on Thursday qualifies IMCR for a Bullish Bounce setup. After several sessions of declining prices, IMCR should soon begin trading in step with its established weekly uptrend. Tell your broker to BUY shares if IMCR moves up to our entry trigger set at 40.77. You can also enter a 3.29 trailing stop, to be replaced with a 1.65 trailing stop when you obtain a 2.96 profit. IMCR closed Thursday at 40.15. Earnings Report Date: Aug 8, 2024. Beta: 0.75. Market-Cap: 2.008B. Optionable. Longboard Pharmaceuticals, Inc. (LBPH: Healthcare/Biotechnology) - BULLISH BOUNCE. LBPH's positive weekly uptrend is still intact despite recent selling that has driven share prices lower. Price action on Thursday shows that traders are aware of the moving average support zone now in play, and they are ready to consider buying again. A shift up from this point will attract even more buyers. The new buying should move LBPH back in step with the bullish weekly trend, so our BUY entry trigger is set at 37.52. Once you hold a position, trail a stop of 3.58. Tighten it to 1.79 on a 6.66 gain. LBPH closed at 35.82 on Thursday. Earnings Report Date: Aug 1, 2024. Beta: 1.26. Market-Cap: 1.393B. Optionable. UTILITIES SECTOR New Fortress Energy Inc. (NFE: Utilities/Utilities - Regulated Gas) - SQUEEZE PLAY. When a stock's daily price range contracts to an unusually low point, you can safely assume that in most cases a breakout from that range will result in a nice price move. To capture a portion of this potential movement we have set both a long and a short entry into NFE. A move to the upside will trigger our BUY entry at 21.18, while a drop to 19.22 will trigger our SELL short entry. Follow your position with a 1.96 trailing stop. Tighten the stop to 0.98 once you have a 1.82 gain. NFE closed Thursday at 20.34. Earnings Report Date: N/A. Beta: 1.47. Market-Cap: 4.171B. 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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