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July 27, 2023 - The RightLine Report
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NOTES FROM THE EDITOR
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During times when the market is bouncing up around like a kangaroo, traders may feel a bit overwhelmed. The average daily range of the S&P 500 can quickly become much larger than usual, making it challenging to navigate the wild swings. To tackle this situation, a double-barrel strategy is recommended:
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"QUICK LIST"
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Stock 07/27 07/27 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
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GBCI 32.88 -0.72 34.38 31.75 2.63/1.32 1.86
SILK 22.39 -0.73 21.48 2.01/1.01 3.08
GNLX 23.36 0.11 21.97 3.49/1.75 5.78
BBIO 32.13 -0.28 33.17 30.63 2.54/1.27 1.9
ITRN 27.75 0.56 28.42 26.49 1.93/0.97 1.32
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 experienced a significant downturn on Thursday, pulling back from recent 52-week highs. Initially the markets were on track for solid gains, boosted by positive economic data and upbeat earnings reports from major companies like META, CMCSA, and LRCX. However, the rally lost steam in the afternoon due to actions in Treasury and currency markets. The S&P 500 briefly crossed the 4,600 level but couldn't sustain it and turned negative midday. The Dow Jones Industrial Average ended its 13-day winning streak after Treasury yields surged on a weak auction and positive data. The Bank of Japan's potential decision to allow long-term interest rates to rise added to market uncertainty. The rise in yields and currency fluctuations affected stock performance, with sectors like REITs and Utilities taking a hit. Despite strong economic data, high growth technology sectors also saw profit-taking after initially leading the market higher. Transports and Smallcaps were among the biggest decliners. On the commodities front, oil prices climbed over 1%, settling at $80.09 per barrel, supported by OPEC+ production cuts and optimism about Chinese demand and global growth. In contrast, gold prices stumbled, ending at $1,945.70 an ounce, due to a stronger dollar and rising Treasury yields impacting the precious metal. Jul 26, 2023 Jul 27, 2023
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Dow 35,520.12 82.05 35,282.72 -237.40
Nasdaq 14,127.28 -17.27 14,050.11 -77.17
S&P 500 4,566.75 -0.71 4,537.41 -29.34
NYSE Volume 3.99B 4.56B
NYSE Advancers 1,846 713
NYSE Decliners 1,056 2,251
Nasdaq Volume 4.33B 5.14B
Nasdaq Advancers 2,733 1,224
Nasdaq Decliners 1,650 3,170
New Highs/Lows
07/20 07/21 07/24 07/25 07/26 07/27
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NYSE New Highs 101 94 103 123 113 151
NYSE New Lows 10 7 10 15 6 17
Nasdaq New Highs 87 106 93 130 123 171
Nasdaq New Lows 75 68 97 106 104 109
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TRADER'S TIP:
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TRADER'S TIP: "Husband and Wife" It's okay to fall in love with a stock, but never marry it. Keeping an objective view of a trade is essential if you want to be able to exit without 'psychological' hang-ups. Do not become overly committed to a stock - the cost can be way too high. **************************
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 - 4537.41 July 27, 2023 52-Week High: 4607.07 52-Week Low: 3491.58 Daily Trend: UP Weekly trend: UP Weekly Pivot Levels Resistance 3: 4686.95 Resistance 2: 4613.42 Resistance 1: 4574.88 Pivot: 4539.89 Support 1: 4501.35 Support 2: 4466.35 Support 3: 4392.82 https://www.prorightline.com/rlch/072723SPX.jpg--ECONOMIC REPORTS AND EVENTS (all times are Eastern): Monday, July 24, 2023: 24-Jul 9:45 am S&P "flash" U.S. manufacturing PMI 24-Jul 9:45 am S&P "flash" U.S. services PMI Tuesday, July 25, 2023: 25-Jul 9:00 am 25-Jul 10:00 am Consumer confidence Wednesday, July 26, 2023: 26-Jul 2:00 am FOMC decision on interest-rate policy 26-Jul 2:30 pm Fed Chairman Powell press conference Thursday, July 27, 2023: 27-Jul 8:30 am Initial jobless claims 27-Jul 8:30 am Durable-goods orders 27-Jul 8:30 am Durable-goods minus transportation 27-Jul 8:30 am GDP (advanced report) 27-Jul 8:30 am Advanced U.S. trade balance in goods 27-Jul 8:30 am Advanced retail inventories 27-Jul 8:30 am Advanced wholesale inventories 27-Jul 10:00 am Pending home sales Friday, July 28, 2023: 28-Jul 8:30 am Personal income (nominal) 28-Jul 8:30 am Personal spending (nominal) 28-Jul 8:30 am PCE index 28-Jul 8:30 am Core PCE index 28-Jul 8:30 am PCE (year-over-year) 28-Jul 8:30 am Core PCE (year-over-year) 28-Jul 8:30 am Employment cost index 28-Jul 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: "Reversals" When it comes to reversals on daily charts, the closing price is the key price. Also, it's a good idea to give any reversal from support or resistance at least one day to confirm itself. ***********************************
STOCKS COVERED IN THIS ISSUE
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FINANCIAL SERVICES SECTOR Glacier Bancorp, Inc. (GBCI: Financial Services/Banks-Regional) - 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 GBCI. A move to the upside will trigger our BUY entry at 34.38, while a drop to 31.75 will trigger our SELL short entry. Follow your position with a 2.63 trailing stop. Tighten the stop to 1.32 once you have a 1.86 gain. GBCI closed Thursday at 32.88. Earnings Report Date: Oct 18, 2023. Beta: N/A. Market-Cap: 3.646B. Optionable. HEALTHCARE SECTOR Silk Road Medical, Inc (SILK: Healthcare/Medical Devices) - BEARISH U-TURN. Sometimes traders hear about a stock that's in trouble and then short it without any thought to timing the entry. This method often results in less profits even when the trade moves in the desired direction. The Bearish U-Turn setup provides a smoother entry than just jumping in. It also reduces risk by placing both the entry trigger and exit stop near the top of the reversal. We'll use this approach with SILK which met our setup requirements on Thursday. The SELL short trigger for this trade is set at 21.48, and the trailing stop is sized at 2.01. Reset the stop to 1.01 upon getting a 3.08 point gain. SILK closed Thursday at 22.39. Earnings Report Date: Aug 01, 2023. Beta: 1.19. Market-Cap: 867.133M. Optionable. Genelux Corporation (GNLX: Healthcare/Biotechnology) - BEARISH U-TURN. Stocks stuck in a downtrend like GNLX tend to bounce downhill rather than slide lower in a straight line. After interacting with a moving average resistance level on Thursday, GNLX is poised to drop again. To take advantage of this setup, prepare to SELL shares short at 21.97. As usual, follow your entry with a trailing stop. A 3.49 stop will fit GNLX's current price range. Tighten it to 1.75 on a 5.78 gainer. Earnings Report Date: N/A. Beta: N/A. Market-Cap: 606.984M. Not Optionable. BridgeBio Pharma, Inc. (BBIO: Healthcare/Biotechnology) - SQUEEZE PLAY. BBIO 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. BBIO is now at 32.13. We can capture price action either way by placing a BUY trigger at 33.17 and a SELL short trigger at 30.63. Once BBIO 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 2.54. When you acquire a 1.9 profit, tighten the stop to 1.27. Earnings Report Date: Aug 02, 2023. Beta: 0.79. Market-Cap: 5.157B. Optionable. TECHNOLOGY SECTOR Ituran Location and Control Ltd. (ITRN: Technology/Communication Equipment) - SQUEEZE PLAY. Thursday's trading action forced ITRN'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 ITRN 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 28.42 if ITRN moves higher, and place your order to SELL short at 26.49 if price declines to that level. As usual follow your entry with a trailing stop, 1.93 should be sufficient. Reduce your stop to 0.97 on a 1.32 gain. ITRN closed Thursday at 27.75. Earnings Report Date: Aug 15, 2023. Beta: 1.06. Market-Cap: 558.011M. 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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