July 26, 2022 - The RightLine Report
Notes From The Editor
Each trader has his or her own unique style. Some like fast and aggressive set-ups, while others prefer more conservative longer-term trades. Others find that the middle ground of swing trading is their sweet spot. Your approach helps to dictate one of the most crucial aspects of your trading perspective: your preferred chart timeframes, or intervals.
Short-term traders naturally gravitate towards the intraday timeframes, such as the 30-minute or 5-minute. These reveal micro-patterns and intraday trends that would be missed on longer intervals. The daily interval has universal application; no matter what your strategy, because it's closely watched by the vast majority of market participates.
But what about the weekly and monthly? While these two intervals are often overlooked, they can be just as revealing as the daily chart. This is especially true during periods when the major indices are at levels not seen for years. It takes a longer timeframe to find levels of potential support or resistance.
Typically these historical points are yearly lows or major reaction highs. These same levels also can act as "price magnets," which can help Bulls gauge upside potential, and Bears set downside targets.
To harness the power of each of these timeframes, make it a point to switch between them periodically. By expanding your perspective, you'll greatly increase your predictive powers. And for maximum effect, don't forget to apply longer timeframes to individual stocks too.
Here's to profits!
Kent Barton
Senior Analyst
Stocks Covered Today Stock Splits
Quick List
Stock 07/26 07/26 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
------ -------- -------- -------- -------- --------------- --------
LAC 22.69 -0.70 23.59 21.81 1.78/0.89 2.5
ARLP 21.48 0.07 22.16 20.5 1.66/0.83 1.72
INSW 22.51 0.11 23.12 21.56 1.56/0.78 2.18
RLAY 20.68 0.22 22.15 2.79/1.4 4.08
CCRN 26.74 0.69 27.3 2.54/1.27 1.98
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 more on controlling risk go to the RightLine Risk Control System
For a glossary of terms unique to The RightLine Report go to: Glossary
Questions? Send us an email using our Contact Form.
Stocks Covered Today Stock Splits
Market Summary
US stocks were lower on Tuesday following more soft economic data that included fewer new home sales than expected and a drop in consumer confidence. The Federal Open Market Committee began a two-day monetary policy meeting today and it is expected to increase lending rates by 75 basis points for the second consecutive meeting. In equities, 3M (MMM $141), McDonald's (MCD $257) and Coca-Cola (KO $63) all findished higher after beating earnings predictions, but all three companies warned of the impact from inflation for the rest of 2022. Shares of Walmart (WMT $122) dropped after the maga-retailer lowered its earnings guidance due to inflation pressures and changing consumer behaviors. Treasuries and the USD/dollar moved higher, gold and oil prices closed lower.
Jul 25, 2022 Jul 26, 2022
-------------------- --------------------
Dow 31,990.04 90.75 31,761.54 -228.50
Nasdaq 11,782.67 -51.45 11,562.57 -220.09
S&P 500 3,966.84 5.21 3,921.05 -45.79
NYSE Volume 3.6B 3.83B
NYSE Advancers 1,958 1,227
NYSE Decliners 1,282 1,963
Nasdaq Volume 4.24B 4.35B
Nasdaq Advancers 2,245 1,673
Nasdaq Decliners 2,364 2,872
New Highs/Lows
07/19 07/20 07/21 07/22 07/25 07/26
--------------------------------------------
NYSE New Highs 14 13 12 16 25 21
NYSE New Lows 48 31 42 45 60 70
Nasdaq New Highs 37 44 34 43 55 52
Nasdaq New Lows 94 61 78 97 149 172
Stocks Covered Today Stock Splits
TRADER'S TIP: "Free Advice From TV Talking Heads"
When it comes to financial advice, always remember that the brokerage firms who pay the advisors make most of their money from commissions on stock sales. It may only be a few bucks for each transaction, but it adds up to hundreds of billions of dollars. Though many analysts are well intended, a major purpose of their stock picks is to attract customers and generate order flow. Whether the recommendations are profitable or not really isn't that important - the companies make money whenever someone buys or sells shares.
The Technical Analyst
For help with this chart, be sure to read "Understanding The Importance Of Support And Resistance"
and "Improve Your Trading With Moving Averages".
S&P 500 - 3921.05 July 26, 2022
52-Week High: 4818.62
52-Week Low: 3636.85
Daily Trend: UP
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 4318.52
Resistance 2: 4124.71
Resistance 1: 4043.17
Pivot: 3930.90
Support 1: 3849.36
Support 2: 3737.09
Support 3: 3543.28
NASDAQ Composite - 11562.57 July 26, 2022
52-Week High: 16212.23
52-Week Low: 10565.14
Daily Trend: UP
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 13290.35
Resistance 2: 12520.17
Resistance 1: 12177.14
Pivot: 11749.99
Support 1: 11406.96
Support 2: 10979.81
Support 3: 10209.62
Dow Industrials - 31761.54 July 26, 2022
52-Week High: 36952.65
52-Week Low: 29653.27
Daily Trend: UP
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 34173.06
Resistance 2: 32936.78
Resistance 1: 32418.03
Pivot: 31700.50
Support 1: 31181.75
Support 2: 30464.22
Support 3: 29227.94
Stocks Covered Today Stock Splits
Market Calendar
ECONOMIC REPORTS AND EVENTS (all times are Eastern): Tuesday, July 26, 2022: 26-Jul 9 am S&P Case-Shiller national home price index (year-over-year) 26-Jul 10 am Consumer confidence index 26-Jul 10 am New home sales (SAAR) Wednesday, July 27, 2022: 27-Jul 8:30 am Durable goods orders 27-Jul 8:30 am Core capital equipment orders 27-Jul 8:30 am Advance report on trade in goods 27-Jul 10 am Pending home sales index 27-Jul 2 pm Fed funds target rate 27-Jul 2:30 pm Fed Chair Jerome Powell press conference Thursday, July 28, 2022: 28-Jul 8:30 am Gross domestic product, first release (SAAR) 28-Jul 8:30 am Final sales to domestic purchasers (SAAR) 28-Jul 8:30 am Initial jobless claims 28-Jul 8:30 am Continuing jobless claims Friday, July 29, 2022: 29-Jul 8:30 am PCE inflation index 29-Jul 8:30 am Core PCE price index 29-Jul 8:30 am PCE price index (year-over-year) 29-Jul 8:30 am Core PCE price index (year-over-year) 29-Jul 8:30 am Real disposable income 29-Jul 8:30 am Real consumer spending 29-Jul 8:30 am Nominal personal income 29-Jul 8:30 am Nominal consumer spending 29-Jul 8:30 am Employment cost index 29-Jul 9:45 am Chicago PMI 29-Jul 10 am UMich consumer sentiment index (final) 29-Jul 10 am UMich 5-year inflation expectations (final) For a chart of typical Up or Down market reactions to specific major US economic reports go to: Economic Indicator Effects
Stocks Covered Today Stock Splits
TRADER'S TIP: "Seeing the Big Picture"
A common mistake that traders make is to narrow their focus on only one of the major indexes. Those who trade tech stocks, for example, might closely follow the Nasdaq while ignoring the S&P 500 and Dow. The problem with this narrowed perspective is that the major indices often move in tandem. So even though the Nasdaq may have broken out, the buying could disappear if the Dow or SPX runs into overhead resistance. Keep an eye on broader market behavior by monitoring major support/resistance levels all three indexes. When at least two of them are showing similar technicals - such as a breakout to new highs or a bounce from a key moving average - odds of a successful trade are improved.
Stocks Covered in This Issue
BASIC MATERIALS SECTOR
Lithium Americas Corp. (LAC: Basic Materials/Other Industrial Metals & Mining) - SQUEEZE PLAY. Tuesday's trading session left LAC 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 23.59 and your SELL short trigger at 21.81. One of the orders will be triggered by upcoming price action. When your market order is filled, cancel the remaining trigger and enter a 1.78 trailing stop. Once you have a 2.5 profit, reduce the stop to 0.89. Earnings Report Date: Aug 03, 2022. Beta: 1.64. Market-Cap: 3.059B. Optionable.
ENERGY SECTOR
Alliance Resource Partners, L.P. (ARLP: Energy/Thermal Coal) - SQUEEZE PLAY. The ticker for Tuesday's session shows ARLP 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 22.16 and a SELL short trigger at 20.5. When ARLP 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 1.66 trailing stop. Upon reaching a 1.72 profit, resize the stop to 0.83. Earnings Report Date: Aug 01, 2022. Beta: 1.45. Market-Cap: 2.732B. Optionable.
International Seaways, Inc. (INSW: Energy/Oil & Gas Midstream) - SQUEEZE PLAY. INSW is stuck in a Bull/Bear deadlock. Fortunately for traders this impasse should be resolved soon, with one side or the other taking control. We want to be positioned for a potential quick move up or down, so get ready to catch this train with a BUY entry at 23.12 and a SELL short entry at 21.56. Once your trade is filled, enter a 1.56 trailing stop. Tighten it to 0.78 after a 2.18 gain. INSW closed on Tuesday at 22.51. Earnings Report Date: Aug 08, 2022. Beta: 0.07. Market-Cap: 1.118B. Optionable.
HEALTHCARE SECTOR
Relay Therapeutics, Inc. (RLAY: Healthcare/Biotechnology) - BULLISH BOUNCE. Another bullish bouncer, RLAY appears ready to resume trading in an uptrend after recent selling forced the stock lower for several days. Tuesday's positive price action near Moving Average support says it's time to BUY shares if RLAY reaches our entry trigger set at 22.15. Also place a 2.79 trailing stop which can be narrowed to 1.4 when you reach a 4.08 profit. RLAY closed Tuesday at 20.68. Earnings Report Date: Aug 10, 2022. Beta: 1.44. Market-Cap: 2.247B. Optionable.
Cross Country Healthcare, Inc. (CCRN: Healthcare/Medical Care Facilities) - BULLISH BOUNCE. Positive price behavior near moving average support on Tuesday qualifies CCRN for a Bullish Bounce setup. After several sessions of declining prices, CCRN should soon begin trading in step with its established weekly uptrend. Tell your broker to BUY shares if CCRN moves up to our entry trigger set at 27.3. You can also enter a 2.54 trailing stop, to be replaced with a 1.27 trailing stop when you obtain a 1.98 profit. CCRN closed Tuesday at 26.74. Earnings Report Date: Aug 03, 2022. Beta: 0.93. Market-Cap: 1.022B. 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.
Stocks Covered Today Stock Splits
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
---------------- ------- -------- ------- ------ -------
Gamestop GME 7/7/2022 7/22/2022 4-for-1 Yes
Alphabet GOOG 2/1/2022 7/18/2022 20-for-1 Yes
Nasdaq Inc NDAQ 7/20/2022 8/29/2022 3-for-1 Yes
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 in the RightLine Member's Area.
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