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June 1, 2023 - The RightLine Report
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NOTES FROM THE EDITOR
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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.
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"QUICK LIST"
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Stock 06/01 06/01 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
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QTRX 20.14 0.52 20.72 2.09/1.05 3.1
ACAD 23.90 0.39 24.25 2.58/1.29 1.5
SDGR 35.09 1.63 35.81 3.45/1.73 3.52
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" 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 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
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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
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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
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TRADER'S TIP:
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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
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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 - 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 https://www.prorightline.com/rlch/060123SPX.jpg--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" 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: "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
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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. ACADIA Pharmaceuticals Inc. (ACAD: Healthcare/Biotechnology) - 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. ACAD's reaction to support on Thursday created a Bullish Bounce setup with a BUY entry trigger at 24.25. Use a 2.58 trailing stop, which should work well with ACAD's typical daily range. Tighten it to 1.29 on a 1.5 profit. ACAD closed at 23.90 on Thursday. Earnings Report Date: Aug 07, 2023. Beta: 0.54. Market-Cap: 3.887B. Optionable. Schrödinger, Inc. (SDGR: Healthcare/Health Information Services) - 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 SDGR which met our setup criteria on Thursday. The BUY trigger for this trade is at 35.81, and the trailing stop is sized at 3.45. Resize the stop to 1.73 upon collecting a 3.52 point gain. SDGR closed Thursday at 35.09. Earnings Report Date: Aug 02, 2023. Beta: 1.06. Market-Cap: 2.51B. 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. 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. 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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