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July 7, 2022 - The RightLine Report
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NOTES FROM THE EDITOR
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Volatility can be a swing trader's best friend. The more the market gyrates, the more trade set-ups are created. And when stocks are moving faster, it takes less time for profitable set-ups to come to fruition.
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"QUICK LIST"
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Stock 07/07 07/07 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
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NOG 24.28 1.15 24.95 23.25 1.7/0.85 4.5
DK 24.35 0.77 25.31 23.33 1.98/0.99 3.34
FUTU 52.20 2.29 52.97 4.3/2.15 6.74
ABBV 152.00 -0.53 154.58 9.12/4.56 6.74
YOU 22.27 0.22 23.16 21.36 1.8/0.9 4.14
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 were higher on Thursday, as the S&P 500 and Nasdaq posted a fourth consecutive bullish session in the face of recession concerns and tighter Fed Bank monetary policies. Economic news included a narrower trade deficit than expected and an uptick in unemployment claims. In equities, Merck & Co (MRK $93) is reportedly in talks to buy Seagen(SGEN $178) in a $40-billion deal. Gold and oil advanced upward in price, while treasuries were lower, while the USD/dollar finished near even.
Jul 6, 2022 Jul 7, 2022
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Dow 31,037.68 69.86 31,384.55 346.87
Nasdaq 11,361.85 39.61 11,621.35 259.49
S&P 500 3,845.08 13.69 3,902.62 57.54
NYSE Volume 4.46B 4.15B
NYSE Advancers 1,240 2,494
NYSE Decliners 2,013 752
Nasdaq Volume 4.85B 4.72B
Nasdaq Advancers 1,947 3,426
Nasdaq Decliners 2,646 1,124
New Highs/Lows
06/30 07/01 07/04 07/05 07/06 07/07
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NYSE New Highs 12 12 0 4 12 11
NYSE New Lows 342 205 0 313 182 59
Nasdaq New Highs 18 15 0 20 25 24
Nasdaq New Lows 535 318 0 477 209 118
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TRADER'S TIP:
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TRADER'S TIP: "Small Stocks & Big Moves" Studies show that most stocks which increase in price by ten times or more are "small-cap" or "micro-cap." This is due to the relatively low number of shares available. As demand for the stock increases, the price rises dramatically. If you want big explosive moves, think small- cap.
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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 - 3902.62 July 7, 2022 52-Week High: 4818.62 52-Week Low: 3636.85 Daily Trend: UP Weekly trend: DOWN Weekly Pivot Levels Resistance 3: 4251.00 Resistance 2: 4043.81 Resistance 1: 3934.57 Pivot: 3836.62 Support 1: 3727.38 Support 2: 3629.43 Support 3: 3422.24 https://www.prorightline.com/rlch/070722SPX.jpg--ECONOMIC REPORTS AND EVENTS (all times are Eastern): Monday, July 04, 2022: 04-Jul Independence Day holiday. None scheduled Tuesday, July 05, 2022: 05-Jul 10 am Factory orders 05-Jul 10 am Core capital equipment orders revision Wednesday, July 06, 2022: 06-Jul 9:45 am 06-Jul 10 am ISM services index 06-Jul 10 am Job openings 06-Jul 10 am Quits Thursday, July 07, 2022: 07-Jul 8:15 am ADP employment report (monthly change) 07-Jul 8:30 am Initial jobless claims 07-Jul 8:30 am Continuing jobless claims 07-Jul 8:30 am Foreign trade balance Friday, July 08, 2022: 08-Jul 8:30 am Nonfarm payrolls (monthly change) 08-Jul 8:30 am Unemployment rate 08-Jul 8:30 am Average hourly earnings 08-Jul 8:30 am Labor force participation rate, 25-54 08-Jul 10 am Wholesale inventories revision 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: "Ten Feet Tall and Bullet Proof" The height of a support or resistance zone determines its strength. For example a thick congestion zone is more resistant than a thin one. As a rule of thumb a zone height equal to 1% of the current price is considered minor, 3% is intermediate, and 7% or more is major support or resistance.
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STOCKS COVERED IN THIS ISSUE
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ENERGY SECTOR Northern Oil and Gas, Inc. (NOG: Energy/Oil & Gas E&P) - SQUEEZE PLAY. A look at NOG'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 24.95 and a SELL short trigger at 23.25. Once NOG shows which way it's headed, place your triggered entry order. As soon as your order is filled, follow with a trailing stop of 1.7 and tighten to 0.85 on a 4.5 gain. NOG closed Thursday at 24.28. Earnings Report Date: Aug 03, 2022. Beta: 2.16. Market-Cap: 1.934B. Optionable. Delek US Holdings, Inc. (DK: Energy/Oil & Gas Refining & Marketing) - SQUEEZE PLAY. Thursday's trading action forced DK'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 DK 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 25.31 if DK moves higher, and place your order to SELL short at 23.33 if price declines to that level. As usual follow your entry with a trailing stop, 1.98 should be sufficient. Reduce your stop to 0.99 on a 3.34 gain. DK closed Thursday at 24.35. Earnings Report Date: Aug 04, 2022. Beta: 1.63. Market-Cap: 1.723B. Optionable. FINANCIAL SERVICES SECTOR Futu Holdings Limited (FUTU: Financial Services/Capital Markets) - BULLISH BOUNCE. Everyone familiar with price charts knows that a stock tends to bounce its way higher rather than move in a straight line. The lower levels of these short-term rebounds offer a safe and often early entry into stocks that are in the process of establishing longer-term uptrends. FUTU's reaction to support on Thursday created a Bullish Bounce setup with a BUY entry trigger at 52.97. Use a 4.3 trailing stop, which should work well with FUTU's typical daily range. Tighten it to 2.15 on a 6.74 profit. FUTU closed at 52.20 on Thursday. Earnings Report Date: Aug 09, 2022. Beta: 0.45. Market-Cap: 7.673B. Optionable. HEALTHCARE SECTOR AbbVie Inc. (ABBV: Healthcare/Drug Manufacturers-General) - BULLISH BOUNCE. Some people hear of a stock that's performing nicely and then buy it without any regard for timing the entry. This approach usually leaves money on the table, money that could just as well be added to profits. The Bullish Bounce setup provides a well timed entry and reduces exposure to risk by placing both the entry trigger and exit stop near the bottom of the bounce. We have an opportunity to use this approach with ABBV which met our setup criteria on Thursday. The BUY trigger for this trade is at 154.58, and the trailing stop is sized at 9.12. Resize the stop to 4.56 upon collecting a 6.74 point gain. ABBV closed Thursday at 152.00. Earnings Report Date: Jul 28, 2022. Beta: 0.75. Market-Cap: 268.601B. Optionable. TECHNOLOGY SECTOR Clear Secure, Inc. (YOU: Technology/Software-Application) - SQUEEZE PLAY. Thursday's narrow price range has created a potentially profitable setup in YOU, 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 23.16 and a SELL short entry at 21.36. Let YOU's price action determine your long or short entry. Once the order is filled, place a 1.8 trailing stop, and tighten it to 0.9 upon getting a 4.14 gain. YOU closed Thursday at 22.27. Earnings Report Date: N/A. Beta: N/A. Market-Cap: 3.337B. 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/
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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
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Gamestop GME 7/7/2022 7/22/2022 4-for-1 Yes
For a closer look at the different stages of a Stock Split go to: https://prorightline.com/index.php/trading-stock-splits-stages/
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Best of luck and have a Great Week!
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