June 1, 2023 - The RightLine Report
Notes From The Editor
The trend is a powerful force in trading, and it's often said that "the trend is your friend." This simple but effective axiom can lay the groundwork for a successful trading career. It suggests that the majority of winning trades occur within the highs and lows that mark significant inflection points.
The beauty of this concept is that you don't have to be a master at predicting exact tops or bottoms in the market. It's a challenging task to forecast when the market will reach a crucial inflection point, or to definitively identify if one has just occurred. Thankfully, following a reliable trend is a much more straightforward approach.
The bulk of profits in trading come from capitalizing on the middle of trends, rather than attempting to time the precise tops or bottoms. One popular strategy for trend following involves identifying fresh breakouts or breakdowns that align with the prevailing trend. Additionally, trend continuation bounces can serve as excellent entry opportunities.
While trend reversals can also be part of a successful trading strategy, it's crucial to exercise caution and be highly selective with this approach. Ensure that the market or stock is rebounding or rolling over from a clear and unambiguous support or resistance level. This significantly increases the likelihood of a successful trade and aids in determining appropriate stop-loss levels.
In essence, freeing yourself from the pressure of calling tops or bottoms makes trading much easier. Leave that task to the analysts and commentators who specialize in such predictions. Instead, focus on analyzing the technical aspects of the market, ignore the hype, and you'll find yourself moving closer to achieving your trading goals.
Here's to profits,
Kent Barton
Senior Analyst
Stocks Covered Today Stock Splits
Quick List
Stock 06/01 06/01 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
------ -------- -------- -------- -------- --------------- --------
QTRX 20.14 0.52 20.72 2.09/1.05 3.1
ZNTL 25.74 -0.30 26.53 24.46 2.07/1.04 3.1
ARCT 27.07 -0.27 27.93 25.94 1.99/1 3.72
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
Stocks had a reason to celebrate as the debt ceiling deal cleared the House of Representatives, sparking a rally in the market. The bill now heads to the Senate, with hopes of avoiding a default before the June 5 deadline. The deal proposes to suspend the debt ceiling until 2025, extending beyond the upcoming U.S. presidential election, and includes measures to control government spending. Investor sentiment also received a boost from positive news in Europe, where equities ended higher and inflation came in lower than expected. Additionally, there was some relief in the commodity markets as oil prices and industrial metals rebounded from their six-month lows. In terms of the labor market, all eyes are on the upcoming monthly jobs report. Today, the focus was on the US jobless claims data and the ADP payroll figures, both of which indicated a strong labor market. Initial jobless claims rose slightly from the previous week but remained below expectations. Looking back at May, it was a mixed month for equities. Oil experienced its worst monthly performance since November 2021 due to disappointing China growth. However, there was a bright spot in the tech sector, driven by the power of artificial intelligence (AI), which fueled a rally in the Nasdaq and helped the S&P 500 finish the month relatively flat compared to international equities.
May 31, 2023 Jun 1, 2023
-------------------- --------------------
Dow 32,908.27 -134.51 33,061.57 153.30
Nasdaq 12,935.29 -82.14 13,100.98 165.70
S&P 500 4,179.83 -25.69 4,221.02 41.19
NYSE Volume 6.07B 4.42B
NYSE Advancers 1,295 2,140
NYSE Decliners 1,687 836
Nasdaq Volume 5.98B 4.63B
Nasdaq Advancers 1,870 2,987
Nasdaq Decliners 2,569 1,472
New Highs/Lows
05/25 05/26 05/29 05/30 05/31 06/01
--------------------------------------------
NYSE New Highs 33 47 0 51 20 27
NYSE New Lows 144 75 0 78 117 76
Nasdaq New Highs 72 124 0 128 51 84
Nasdaq New Lows 192 142 0 146 202 123
Stocks Covered Today Stock Splits
TRADER'S TIP: "Sizing Up a Bounce"
When looking for a new uptrend to emerge after a decline, consider the time and distance of the drop. There is usually a relationship between the amount of the decline and how long it will take for a rebound to get underway. Although a technical support such as a moving average or trend line may pinpoint the specific end of a "fall," you shouldn't expect a stock to rocket higher immediately after dropping for six weeks in a row.
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 - 4221.02 June 1, 2023
52-Week High: 4325.28
52-Week Low: 3491.58
Daily Trend: UP
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 4391.88
Resistance 2: 4282.99
Resistance 1: 4244.21
Pivot: 4174.09
Support 1: 4135.32
Support 2: 4065.20
Support 3: 3956.31
NASDAQ Composite - 13100.98 June 1, 2023
52-Week High: 13181.09
52-Week Low: 10088.83
Daily Trend: UP
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 13969.93
Resistance 2: 13383.87
Resistance 1: 13179.78
Pivot: 12797.81
Support 1: 12593.72
Support 2: 12211.75
Support 3: 11625.69
Dow Industrials - 33061.57 June 1, 2023
52-Week High: 34712.28
52-Week Low: 28660.94
Daily Trend: UP
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 34915.54
Resistance 2: 33989.80
Resistance 1: 33541.57
Pivot: 33064.06
Support 1: 32615.83
Support 2: 32138.32
Support 3: 31212.58
Stocks Covered Today Stock Splits
Market Calendar
ECONOMIC REPORTS AND EVENTS (all times are Eastern): Monday, June 05, 2023: 29-May MONDAY, MAY 29 29-May Memorial Day, all markets closed 29-May TUESDAY, MAY 30 Tuesday, June 06, 2023: 30-May 9:00 am 30-May 1:00 pm Richmond Fed President Tom Barkin speaks 30-May 10:00 am Consumer confidence 30-May WEDNESDAY, MAY 31 Wednesday, June 07, 2023: 31-May 8:15 am ADP employment 31-May 9:45 am Chicago Business Barometer 31-May 10:00 am Job openings 31-May 12:30 pm Philadelphia Fed President Patrick Harker speaks 31-May 2:00 pm Federal Reserve Beige Book 31-May THURSDAY, JUNE 1 Thursday, June 01, 2023: 01-Jun 8:30 am Initial jobless claims 01-Jun 8:30 am Continuing jobless claims 01-Jun 8:30 am U.S. productivity 01-Jun 10:00 am ISM manufacturing 01-Jun 10:00 am Construction spending 01-Jun 1:00 pm Philadelphia Fed President Patrick Harker speaks 01-Jun FRIDAY, JUNE 2 Friday, June 02, 2023: 02-Jun 8:30 am U.S. employment report 02-Jun 8:30 am U.S. unemployment rate 02-Jun 8:30 am U.S. hourly wages 02-Jun 8:30 am Hourly wages year over year 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: "The Perfect Indicator"
Most experienced traders have their favorite indicator, yet they will readily admit that there is no "Holy Grail." Instead of searching for the perfect indicator, choose several that you can become comfortable with, and learn to interpret the conflicting signals.
Stocks Covered in This Issue
HEALTHCARE SECTOR
Quanterix Corporation (QTRX: Healthcare/Medical Devices) - BULLISH BOUNCE. Among other strengths, the Bullish Bounce protects traders from buying a stock "at the top" of its current cycle. The entry into this setup always takes place in upward-moving stocks that have retreated a bit under normal conditions. Now sitting at 20.14, QTRX is on our radar for a BUY entry at 20.72. If you purchase shares of QTRX, be sure to also place a trailing stop of 2.09. Snug it up to 1.05 on a 3.1 gain. Earnings Report Date: Aug 07, 2023. Beta: 1.34. Market-Cap: 753.411M. Optionable.
Arcturus Therapeutics Holdings Inc. (ARCT: Healthcare/Biotechnology) - SQUEEZE PLAY. A look at ARCT'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 27.93 and a SELL short trigger at 25.94. Once ARCT shows which way it's headed, place your triggered entry order. As soon as your order is filled, follow with a trailing stop of 1.99 and tighten to 1 on a 3.72 gain. ARCT closed Thursday at 27.07. Earnings Report Date: Aug 07, 2023. Beta: 2.61. Market-Cap: 719.06M. Optionable.
Zentalis Pharmaceuticals, Inc. (ZNTL: Healthcare/Biotechnology) - SQUEEZE PLAY. Thursday's narrow price range has created a potentially profitable setup in ZNTL, 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 26.53 and a SELL short entry at 24.46. Let ZNTL's price action determine your long or short entry. Once the order is filled, place a 2.07 trailing stop, and tighten it to 1.04 upon getting a 3.1 gain. ZNTL closed Thursday at 25.74. Earnings Report Date: Aug 07, 2023. Beta: 1.84. Market-Cap: 1.531B. 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
---------------- ------- -------- ------- ------ -------
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.
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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