June 15, 2023 - The RightLine Report
Notes From The Editor
Simplifying a Complex Market
Ever felt utterly overwhelmed by the market? If you've been trading for awhile, chances are good that you've been in this position several times. In a constantly changing market full of stocks, indexes, indicators, and news developments, it's easy to feel overwhelmed from time to time.
If you find yourself gasping for air in this deluge of data, it's time for a healthy dose of simplicity. Start by scaling back your focus. If you typically like to keep an eye on 50 stocks, cut back to 10 or 15. This will help you get a better sense of the subtle nuances and tendencies of each of those equities. And at the same time, your narrower focus will help you eliminate the distraction of watching all those other stocks.
This narrowing approach can also be applied to sectors. If you like to watch, say, homebuilders, tech, bankers, and oil stocks, you may want to consider limiting your attention to just one or two of those groups. Doing so can also help you get a better grip on what news developments are driving action within that sector.
Similarly, indicators often present a solid opportunity to create simplicity. When you have too many lines crossing your charting program and your screen looks like it's covered in digital spaghetti, it's easy to suffer from Analysis Paralysis. Focus instead on only the most important influencers of price action. These typically include horizontal support/resistance levels, trendlines, and key moving averages.
As for the daily flood of news developments, there's an even easier solution: turn off your TV and click away from stock-related news sites. While it's good to have a general understanding of what might be impacting the market on a given day - for example, the release of key economic data - too much news can needlessly clutter your mind. Tune out the static and the hype, and focus on what really matters: the price action of the stocks you're watching and trading.
Here's to profits,
Kent Barton
Senior Analyst
Stocks Covered Today Stock Splits
Quick List
Stock 06/15 06/15 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
------ -------- -------- -------- -------- --------------- --------
IPI 21.77 0.44 22.21 20.71 1.5/0.75 1.54
SCHW 55.51 1.15 56.33 4.02/2.01 2.6
AROW 21.85 0.35 / 0
VKTX 22.46 0.06 23.08 21.29 1.79/0.9 3.42
SSTI 21.20 -0.10 21.74 20.4 1.34/0.67 2.58
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
After a slow start on Thursday, markets finished sharply higher after digesting Wednesday's Fed meeting in which the central bank held rates steady while signaling more rate hikes may lie ahead. After a healthy rally over the last few months, the latest Fed commentary did little to drain enthusiasm, with Thursday's gain reflecting the view that the Fed will not ultimately tighten to the point at which the economy suffers a dramatic downturn. This was corroborated by equity performance, which featured a mixture of leadership from technology and communication services, as well as financials and cyclical industrials.
Elsewhere, global stocks traded largely to the upside, while the USD/dollar and oil prices were also higher. Following an initial move higher that led the 10-year Treasury yield back above 3.8%, rates reversed course after the release of a batch of economic data that reflected slowing hiring, spending, and factory activity, sending yields lower on the day.
As for the latest Fed announcement, we think it's wise for the Fed to err on the side of caution when it comes to the fight against inflation, though we're not fully convinced multiple additional rate hikes are set in stone.
Jun 14, 2023 Jun 15, 2023
-------------------- --------------------
Dow 33,979.33 -232.79 34,408.06 428.73
Nasdaq 13,626.48 53.16 13,782.82 156.34
S&P 500 4,372.59 3.58 4,425.84 53.25
NYSE Volume 4.26B 4.19B
NYSE Advancers 1,172 2,237
NYSE Decliners 1,793 726
Nasdaq Volume 5.79B 5.69B
Nasdaq Advancers 1,697 2,926
Nasdaq Decliners 2,736 1,491
New Highs/Lows
06/08 06/09 06/12 06/13 06/14 06/15
--------------------------------------------
NYSE New Highs 83 70 98 137 118 104
NYSE New Lows 18 17 12 8 18 22
Nasdaq New Highs 87 117 162 223 185 189
Nasdaq New Lows 62 73 83 71 89 84
Stocks Covered Today Stock Splits
TRADER'S TIP: "Computer Based Trading"
Computer technology helps us trade more effectively, but only if our methodology is reliable. "Reliable" doesn't necessarily mean complex. In fact most reliable short-term trading methods are fairly simple. However, every method should include some type of technical analysis to time entries and exits, along with a risk management component to prevent account damage.
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 - 4425.84 June 15, 2023
52-Week High: 4439.20
52-Week Low: 3491.58
Daily Trend: UP
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 4417.28
Resistance 2: 4355.73
Resistance 1: 4327.29
Pivot: 4294.18
Support 1: 4265.74
Support 2: 4232.63
Support 3: 4171.08
NASDAQ Composite - 13782.82 June 15, 2023
52-Week High: 13828.17
52-Week Low: 10088.83
Daily Trend: UP
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 13837.79
Resistance 2: 13541.32
Resistance 1: 13400.23
Pivot: 13244.85
Support 1: 13103.76
Support 2: 12948.38
Support 3: 12651.91
Dow Industrials - 34408.06 June 15, 2023
52-Week High: 34712.28
52-Week Low: 28660.94
Daily Trend: UP
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 34901.85
Resistance 2: 34326.22
Resistance 1: 34101.50
Pivot: 33750.59
Support 1: 33525.87
Support 2: 33174.96
Support 3: 32599.33
Stocks Covered Today Stock Splits
Market Calendar
ECONOMIC REPORTS AND EVENTS (all times are Eastern): Monday, June 19, 2023: 12-Jun MONDAY, JUNE 12 12-Jun None scheduled 12-Jun TUESDAY, JUNE 13 Tuesday, June 20, 2023: 13-Jun 6:00 am NFIB optimism index 13-Jun 8:30 am Consumer price index 13-Jun 8"30 am Core CPI 13-Jun 8:30 am CPI year over year 13-Jun 8:30 am Core CPI year over year 13-Jun WEDNESDAY, JUNE 14 Wednesday, June 21, 2023: 14-Jun 8:30 am Producer price index 14-Jun 8"30 am Core PPI 14-Jun 8:30 am PPI year over year 14-Jun 8:30 am Core PPI year over year 14-Jun 2:00 pm Fed decision on interest-rate policy 14-Jun 2:30 pm Fed Chairman Powell press conference 14-Jun THURSDAY, JUNE 15 Thursday, June 22, 2023: 15-Jun 8:30 am Initial jobless claims 15-Jun 8:30 am U.S. retail sales 15-Jun 8:30 am Retail sales minus autos 15-Jun 8:30 am Import price index 15-Jun 8:30 am Import price index minus fuel 15-Jun 8:30 am Empire State manufacturing survey 15-Jun 8:30 am Philadelphia Fed manufacturing survey 15-Jun 9:15 am Industrial production 15-Jun 9:15 am Capacity utilization 15-Jun 10:00 am Business inventories 15-Jun FRIDAY, JUNE 16 Friday, June 16, 2023: 16-Jun 10:00 am Consumer sentiment 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: "Margin Trading"
Always use extreme caution when trading on margin. The majority of traders who max out their margin limits wind up getting margin calls that result in big losses. Some brokers require margin be used to pay for half of every purchase of shares. If this is the case, be extremely careful that you always have enough cash on hand to offset any margined positions.
Stocks Covered in This Issue
BASIC MATERIALS SECTOR
Intrepid Potash, Inc. (IPI: Basic Materials/Agricultural Inputs) - SQUEEZE PLAY. Thursday's trading action forced IPI'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 IPI 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 22.21 if IPI moves higher, and place your order to SELL short at 20.71 if price declines to that level. As usual follow your entry with a trailing stop, 1.5 should be sufficient. Reduce your stop to 0.75 on a 1.54 gain. IPI closed Thursday at 21.77. Earnings Report Date: Aug 02, 2023. Beta: 2.04. Market-Cap: 286.463M. Optionable.
FINANCIAL SERVICES SECTOR
The Charles Schwab Corporation (SCHW: Financial Services/Capital Markets) - BULLISH BOUNCE. Another bullish bouncer, SCHW appears ready to resume trading in an uptrend after recent selling forced the stock lower for several days. Thursday's positive price action near Moving Average support says it's time to BUY shares if SCHW reaches our entry trigger set at 56.33. Also place a 4.02 trailing stop which can be narrowed to 2.01 when you reach a 2.6 profit. SCHW closed Thursday at 55.51. Earnings Report Date: Jul 17, 2023. Beta: 0.88. Market-Cap: 101.03B. Optionable.
Arrow Financial Corporation (AROW: Financial Services/Banks-Regional) - SQUEEZE PLAY. AROW 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. AROW is now at 21.85. We can capture price action either way by placing a BUY trigger at and a SELL short trigger at . Once AROW 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 . When you acquire a 0 profit, tighten the stop to . Earnings Report Date: Jun 15, 2023. Beta: 0.66. Market-Cap: 361.652M. Optionable.
HEALTHCARE SECTOR
Viking Therapeutics, Inc. (VKTX: Healthcare/Biotechnology) - 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 VKTX. A move to the upside will trigger our BUY entry at 23.08, while a drop to 21.29 will trigger our SELL short entry. Follow your position with a 1.79 trailing stop. Tighten the stop to 0.9 once you have a 3.42 gain. VKTX closed Thursday at 22.46. Earnings Report Date: Jul 25, 2023. Beta: 0.67. Market-Cap: 2.242B. Optionable.
TECHNOLOGY SECTOR
SoundThinking, Inc. (SSTI: Technology/Software-Application) - SQUEEZE PLAY. A look at SSTI'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 21.74 and a SELL short trigger at 20.4. Once SSTI shows which way it's headed, place your triggered entry order. As soon as your order is filled, follow with a trailing stop of 1.34 and tighten to 0.67 on a 2.58 gain. SSTI closed Thursday at 21.20. Earnings Report Date: Aug 07, 2023. Beta: 1.48. Market-Cap: 259.6M. 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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