June 14, 2022 - The RightLine Report
Notes From The Editor
"Think education is expensive? Try ignorance." RightLine took this bit of wisdom to heart in 1997 and turned it into a company trademark.
Since then we have emphasized a personal trading education as a gateway to financial improvement. Being students of the market, we're always learning. Every day presents new challenges, and within the challenges we find new opportunities. Granted, it does take effort to get an education, yet as the saying goes, it's much less expensive than ignorance.
Unfortunately most investors do "try ignorance" - although unknowingly.
And while some uninformed folks view trading stocks as a type of gambling, their lack of understanding usually keeps them from accessing the most valuable profit-producing tools and training available anywhere.
Trading is an extremely valuable resource for any student of the market, because teaches profit skills efficiently. I know of no better way to compact as much usable experience into such a short period of time.
Once you've learned how to trade, you can apply your skills to any time frame - from minutes to years.
The repetition of strategic planning, entering positions under live conditions, implementing risk control, and managing trades sharpens your abilities faster than most people would ever imagine.
Just remember to be patient with yourself. Learning this craft requires several years to reach a high level of consistent performance - even if you are a fast learner.
Regardless of the way anyone chooses to learn or how they perceive the rise and fall of stock prices, we can be certain that market cycles will continue to repeat themselves. There will be varying degrees of increase and decline between the reversal levels, but the up and down cycles are sure to continue in all time frames.
And since they always do, it follows that if we want to make money in the market, the best role to assume is that of a student. Why? Because this point of view allows us to use the knowledge we accumulate to improve our skills. Students are willing to accept mistakes as part of the learning process and make adjustments along the way.
The knowledge gained in the student role is powerful. It allows us to assign significant value to the experience of the journey as well as the destination. The benefits of doing that are real, and once prepared you can literally name your own price.
Trade well!
Thomas Sutton, Editor
Stocks Covered Today Stock Splits
Quick List
Stock 06/14 06/14 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
------ -------- -------- -------- -------- --------------- --------
CCXI 23.37 0.17 24.09 22.05 2.04/1.02 3
RCMT 23.10 0.86 23.89 21.58 2.31/1.16 4.54
BEKE 15.27 0.86 15.64 1.83/0.92 1.9
LSPD 20.31 0.18 20.99 19.03 1.96/0.98 4.46
YOU 21.02 -0.49 22.09 20.03 2.06/1.03 5.52
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
The major US stock averages were mixed Tuesday after the recent sharp selloff that resulted from last week's much hotter than expected consumer price inflation report. The Dow and S&P 500 were both lower, while the Nasdaq made a small gain. Inflation worries have raised expectations of a more aggressive Federal Reserve Bank, which in turn has fostered recession concerns. In other economic news, small business optimism declined as inflation concerns continue to weigh on sentiment. Equities headlines feaured news from FedEx (FDX $230) who announced a dividend increase, while Oracle (ORCL $71) beat earnings expectations on strong cloud revenues. Gold, oil prices and treasuries were all lower, the USD/moved higher.
Jun 13, 2022 Jun 14, 2022
-------------------- --------------------
Dow 30,516.74 -876.05 30,364.83 -151.91
Nasdaq 10,809.23 -530.80 10,828.35 19.12
S&P 500 3,749.63 -151.23 3,735.48 -14.15
NYSE Volume 5.7B 5.26B
NYSE Advancers 183 1,242
NYSE Decliners 3,166 2,071
Nasdaq Volume 5.94B 4.85B
Nasdaq Advancers 584 2,015
Nasdaq Decliners 4,240 2,715
New Highs/Lows
06/07 06/08 06/09 06/10 06/13 06/14
--------------------------------------------
NYSE New Highs 98 91 12 4 1 4
NYSE New Lows 66 51 111 251 801 850
Nasdaq New Highs 55 50 25 23 22 15
Nasdaq New Lows 180 124 177 464 1,138 1,020
Stocks Covered Today Stock Splits
TRADER'S TIP: "Squeeze Plays"
Price squeezed into a much smaller-than-average range causes a dramatic drop in volatility. Due to the cyclical and explosive nature of volatility, powerful price moves tend to occur soon after these narrow range setups. But there's no reason to jump in too fast. Be patient, let the market show its hand first, and you'll get a low risk entry with the potential for high reward!
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 - 3735.48 June 14, 2022
52-Week High: 4818.62
52-Week Low: 3705.68
Daily Trend: DOWN
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 4527.17
Resistance 2: 4258.55
Resistance 1: 4079.70
Pivot: 3989.93
Support 1: 3811.08
Support 2: 3721.31
Support 3: 3452.69
NASDAQ Composite - 10828.35 June 14, 2022
52-Week High: 16212.23
52-Week Low: 10733.04
Daily Trend: DOWN
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 13472.15
Resistance 2: 12555.02
Resistance 1: 11947.52
Pivot: 11637.89
Support 1: 11030.39
Support 2: 10720.76
Support 3: 9803.63
Dow Industrials - 30364.83 June 14, 2022
52-Week High: 36952.65
52-Week Low: 30144.23
Daily Trend: DOWN
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 35700.39
Resistance 2: 33852.86
Resistance 1: 32622.82
Pivot: 32005.33
Support 1: 30775.29
Support 2: 30157.80
Support 3: 28310.27
Stocks Covered Today Stock Splits
Market Calendar
ECONOMIC REPORTS AND EVENTS (all times are Eastern): Monday, June 13, 2022: 13-Jun 11 am NY Fed 1-year inflation expectations 13-Jun 11 am NY Fed 3-year inflation expectations Tuesday, June 14, 2022: 14-Jun 6 am NFIB small-business index 14-Jun 8:30 am Producer price index final demand Wednesday, June 15, 2022: 15-Jun 8:30 am Retail sales 15-Jun 8:30 am Retail sales excluding vehicles 15-Jun 8:30 am Import price index 15-Jun 8:30 am Empire state manufacturing index 15-Jun 10 am NAHB home builders index 15-Jun 10 am Business inventories 15-Jun 2 pm FOMC statement 15-Jun 2 pm FOMC projections 15-Jun 2 pm Fed Chair Jerome Powell news conference Thursday, June 16, 2022: 16-Jun 8:30 am Initial jobless claims 16-Jun 8:30 am Continuing jobless claims 16-Jun 8:30 am Building permits (SAAR) 16-Jun 8:30 am Housing starts (SAAR) 16-Jun 8:30 am Philadelphia Fed manufacturing index Friday, June 17, 2022: 17-Jun 9:15 am Industrial production index 17-Jun 9:15 am Capacity utilization 17-Jun 10 am Leading economic indicators 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: "Trading Ranges"
When a stock is in a "trading range" you can draw relatively horizontal parallel lines that enclose most of the highs and lows. As time passes, these lines can provide potential resistance - on top - and support - on bottom - for the stock. When it breaks through these lines and disrupts the trading range, a new pattern can begin as long as the stock does not quickly return to its previous range. When the stock breaks out, the previous top - resistance - can become the bottom - support - of a new trading range.
Stocks Covered in This Issue
HEALTHCARE SECTOR
ChemoCentryx, Inc. (CCXI: Healthcare/Biotechnology) - SQUEEZE PLAY. One interesting trait of price volatility is that it cycles back and forth through periods of expansion and contraction. Stocks that have recently seen their daily price range shift from an average or wide range to an extremely contracted state are ideal candidates for expansive price moves. In many cases the next move is relatively fast and covers a sizable amount of territory. To take advantage of these trades we use both a BUY and a SELL entry. This allows us to enter in whichever direction the breakout takes. In CCXI's case we will enter a BUY should it reach the 24.09 level, or a SELL short trade if it drops to 22.05. As usual a trailing stop is essential, 2.04 which should be tightened to 1.02 on a 3 gain. CCXI closed Tuesday at 23.37. Earnings Report Date: Aug 08, 2022. Beta: 1.94. Market-Cap: 1.664B. Optionable.
INDUSTRIALS SECTOR
RCM Technologies, Inc. (RCMT: Industrials/Engineering & Construction) - 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 RCMT. A move to the upside will trigger our BUY entry at 23.89, while a drop to 21.58 will trigger our SELL short entry. Follow your position with a 2.31 trailing stop. Tighten the stop to 1.16 once you have a 4.54 gain. RCMT closed Tuesday at 23.10. Earnings Report Date: Aug 08, 2022. Beta: 1.01. Market-Cap: 260.219M. Optionable.
REAL ESTATE SECTOR
KE Holdings Inc. (BEKE: Real Estate/Real Estate Services) - BULLISH BOUNCE. The charts for BEKE show that despite the downward pressure from sellers recently, the weekly uptrend is still going strong. Buyers showed up again on Tuesday, resulting in the early stages of a rebound that started near moving average support. The resulting Bullish Bounce set-up offers a potential entry point for a long play. Set your trigger to BUY shares at 15.64, and follow your entry with a trailing stop of 1.83. Tighten it to 0.92 when a 1.9 profit is reached. BEKE ended the latest session at 15.27. Earnings Report Date: Aug 09, 2022. Beta: N/A. Market-Cap: 19.331B. Optionable.
TECHNOLOGY SECTOR
Lightspeed Commerce Inc. (LSPD: Technology/Software-Application) - SQUEEZE PLAY. Tuesday's trading action forced LSPD'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 LSPD 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 20.99 if LSPD moves higher, and place your order to SELL short at 19.03 if price declines to that level. As usual follow your entry with a trailing stop, 1.96 should be sufficient. Reduce your stop to 0.98 on a 4.46 gain. LSPD closed Tuesday at 20.31. Earnings Report Date: Aug 03, 2022. Beta: 3.19. Market-Cap: 3.045B. Optionable.
Clear Secure, Inc. (YOU: Technology/Software-Application) - SQUEEZE PLAY. YOU is caught in a dilemma. The stock's compressed price range on Tuesday 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. YOU is now at 21.02. We can capture price action either way by placing a BUY trigger at 22.09 and a SELL short trigger at 20.03. Once YOU 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 2.06. When you acquire a 5.52 profit, tighten the stop to 1.03. Earnings Report Date: N/A. Beta: N/A. Market-Cap: 3.15B. 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
---------------- ------- -------- ------- ------ -------
Amazon AMZN 3/9/2022 6/6/2022 20-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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