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June 17, 2023 - The RightLine Report
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NOTES FROM THE EDITOR
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The Anticipation Approach to Trading
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"QUICK LIST"
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Stock 06/16 06/16 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
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ZION 28.63 -0.35 29.52 27.08 2.44/1.22 3.04
SNV 31.26 -0.16 32.08 29.84 2.24/1.12 2.34
UPST 37.24 -0.46 39.35 35.71 3.64/1.82 6.92
DOCS 32.54 0.19 33.27 31.1 2.17/1.09 2.68
VECO 24.83 0.10 25.18 1.58/0.79 1.72
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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On Friday the major US stock indexes initially rose but experienced a decline later in the session. However, they still ended the week on a positive note due to favorable inflation data and the Federal Reserve's decision not to raise its benchmark lending rate at the midweek meeting. It is worth noting that there is a possibility of future rate hikes in the summer. The S&P 500 Index (SPX) had an impressive week, gaining 2.6%, its strongest performance since March. Similarly, the tech-heavy Nasdaq Composite (COMPX) index rose by 3.2%, while the blue-chip Dow Jones Industrial Average (DJIA) increased by 1.2%. Throughout the week there were positive developments regarding the economy and inflation. The stock market's behavior remained consistent with the trend seen throughout the year, where major technology companies continued to drive most of the market's gains while smaller companies struggled to keep pace. Retailers and regional banks underperformed, resulting in a decline of approximately 1% for the Russell 2000 index. Energy companies emerged as strong performers, benefiting from the continued rally of crude oil futures which surpassed $70 per barrel. Friday On The Week
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Dow 34,299.12 -108.94 +422.34 1.25%
Nasdaq 13,689.57 -93.25 +430.43 3.25%
S&P 500 4,409.59 -16.25 +110.73 2.58%
NYSE Volume 6.94B
NYSE Advancers 1,141
NYSE Decliners 1,806
Nasdaq Volume 8.16B
Nasdaq Advancers 1,774
Nasdaq Decliners 2,659
New Highs/Lows
06/09 06/12 06/13 06/14 06/15 06/16
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NYSE New Highs 70 98 137 118 104 145
NYSE New Lows 17 12 8 18 22 15
Nasdaq New Highs 117 162 223 185 189 217
Nasdaq New Lows 73 83 71 89 84 79
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TRADER'S TIP:
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TRADER'S TIP: "Hi-Tech Trading Platforms" A direct access trading platform will help a good trader make more money, but it does nothing for those who are still trying to grasp the basics of the stock market. Success in this business is more dependent on accurate chart interpretation than buying the newest hi-tech software or hardware. Huge profits are made each month by long-time professional traders who still use the phone to place their orders and manage open positions. As your execution and trade management abilities improve, it becomes obvious that what you know is far more important to your bottom line than any state-of-the-art trading platform. **************************
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 - 4409.59 June 16, 2023 52-Week High: 4448.47 52-Week Low: 3491.58 Daily Trend: UP Weekly trend: UP Weekly Pivot Levels Resistance 3: 4675.67 Resistance 2: 4531.57 Resistance 1: 4470.58 Pivot: 4387.47 Support 1: 4326.48 Support 2: 4243.37 Support 3: 4099.27 https://www.prorightline.com/rlch/061623SPX.jpg--ECONOMIC REPORTS AND EVENTS (all times are Eastern): Monday, June 19, 2023: 19-Jun Juneteenth Day holiday, all markets closed 19-Jun 10:00 am Home builder confidence index Tuesday, June 20, 2023: 20-Jun 8:30 am Housing starts 20-Jun 11:45 am New York Fed President John Williams speaks Wednesday, June 21, 2023: 21-Jun 10:00 am Fed Chair Powell testifies to House panel 21-Jun 10:00 am Senate nomination hearing for Fed Govs. Jefferson and Cook and nominee Kugler Thursday, June 22, 2023: 22-Jun 8:30 am Initial jobless claims 22-Jun 8:30 am U.S. current account 22-Jun 10:00 am Existing home sales 22-Jun 10:00 am Fed Chair Powell testifies to Senate panel 22-Jun 10:00 am U.S. leading economic indicators Friday, June 23, 2023: 23-Jun 8:30 am S&P flash U.S. services PMI 23-Jun 8:30 am S&P flash U.S. manufacturing PMI 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: "Check the Charts, Not the Chatters" When it comes to market reversals, traders usually listen to the wrong sources. They often follow the news media when they would be much better off viewing the technical picture. Avoid the mind numbing chatter of self-appointed experts. These guys and gals are normally there to make money for themselves - not for you. ***********************************
STOCKS COVERED IN THIS ISSUE
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FINANCIAL SERVICES SECTOR Zions Bancorporation, National Association (ZION: Financial Services/Banks-Regional) - 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 ZION's case we will enter a BUY should it reach the 29.52 level, or a SELL short trade if it drops to 27.08. As usual a trailing stop is essential, 2.44 which should be tightened to 1.22 on a 3.04 gain. ZION closed Friday at 28.63. Earnings Report Date: Jul 19, 2023. Beta: 1.10. Market-Cap: 4.24B. Optionable. Synovus Financial Corp. (SNV: Financial Services/Banks-Regional) - SQUEEZE PLAY. Trader indecision has put SNV squarely in the center of a Bull versus Bear standoff. This tight spot should soon give way to a clear winner in the short-term, and we want to be in position for the move. To do that we've set a BUY entry at 32.08 and a SELL short entry at 29.84. Now it's up to SNV to show us which entry will be filled. Once the trade is underway place a 2.24 trailing stop, which can be tightened to 1.12 after you achieve a 2.34 profit. SNV closed on Friday at 31.26. Earnings Report Date: Jul 19, 2023. Beta: 1.36. Market-Cap: 4.568B. Optionable. Upstart Holdings, Inc. (UPST: Financial Services/Credit Services) - SQUEEZE PLAY. In certain stocks a tightly constricted price range is a sign that neither bulls nor bears are confident of winning in the near term. This often means that the side that gives up first causes a quick move in the opposite direction. In these fear dominated skirmishes, opposing traders always benefit from the retreat. In the Squeeze Play setup you can actually play both sides of the inevitable surge. UPST traders reached this state of stand-off on Friday with the tightest range of the past seven days. You can take advantage of their efforts by placing a low risk BUY trigger at 39.35 and a SELL short trigger at 35.71. After one of the two orders is filled, cancel the un-triggered order and place a trailing stop at 3.64 which can be tightened to 1.82 on a 6.92 gain. UPST closed Friday at 37.24. Earnings Report Date: Aug 07, 2023. Beta: 1.46. Market-Cap: 3.079B. Optionable. HEALTHCARE SECTOR Doximity, Inc. (DOCS: Healthcare/Health Information Services) - SQUEEZE PLAY. The struggle between buyers and sellers has resulted in DOCS's narrowest trading range of the past seven sessions. With neither group able to take complete control on Friday, the stock's short term destiny is up for grabs. You can capitalize on this unusually tight condition by placing both a BUY order at 33.27 and a SELL order at 31.1. Regardless of which order is triggered, cancel the other one and follow your entry with a 2.17 trailing stop. Tighten the stop to 1.09 once you have a 2.68 gain. DOCS closed Friday at 32.54. Earnings Report Date: Aug 15, 2023. Beta: N/A. Market-Cap: 6.334B. Optionable. TECHNOLOGY SECTOR Veeco Instruments Inc. (VECO: Technology/Semiconductor Equipment & Materials) - BULLISH BOUNCE. Positive price behavior near moving average support on Friday qualifies VECO for a Bullish Bounce setup. After several sessions of declining prices, VECO should soon begin trading in step with its established weekly uptrend. Tell your broker to BUY shares if VECO moves up to our entry trigger set at 25.18. You can also enter a 1.58 trailing stop, to be replaced with a 0.79 trailing stop when you obtain a 1.72 profit. VECO closed Friday at 24.83. Earnings Report Date: Aug 07, 2023. Beta: 1.25. Market-Cap: 1.284B. 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/ **********************************
TRADER'S CORNER
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"Flipping Stocks" Flipping is a trading tactic that you can use to make sizable gains in a short amount of time. Keep in mind that there are some potential risks in flipping stocks, but if you follow a few simple guidelines the technique can work very well. To "flip" a stock, you enter a position near the close and exit at the open of the next session - with the purpose of making a quick profit. This tactic works equally well from either the long or the short side, but in this article we'll focus primarily on the long (buy) side. The risk is that if bad news hits the stock or the market overnight, you can incur a loss. However, if the market is working well with a large number of stocks finishing the day near their intra-day highs, the odds are in your favor that you will capture a nice profit by holding the stock until the open of the next session. There are a couple of rules to bear in mind if you decide to use this tactic. However, before we look at the "two rules of flipping," here is a bit of background that shows why playing flip trades can be very profitable. Studies by Moore Research Center show that when markets close in the upper 20% of their price range for the day, they tend to move higher the next session. For example, researchers looked at ten years of S&P 500 data and found that when the 20% level was met, prices rose above the previous day's high 80% of the time. Traders and active investors can use this information as part of their planning routine when deciding whether to hold onto current positions, exit, or enter a new one for a quick flip trade. A top 20% market finish into the closing bell could merit holding a position longer than originally planned, whereas a close below that level might prompt a quick sale to lock in profits. The studies by Moore Research also indicated that even though prices rose higher the next day 80% of the time, they only closed higher about 50% of the time - so it's a good idea to keep a tight stop on these "flippers!" Okay, back to the rules. The Two Rules of Flipping 1. Generally you want the market to be on the strong side. You will also want to select stocks that are finishing strong, within 20% of the session high. This is pretty easy to see, if you are watching the market near the close. Ideally you want your stocks to be in a sector that closes in the top 20% of its range with several strong stocks in the group finishing at their highs. There numerous indices for almost every sector, so be sure to monitor the index for stocks that you intend to enter. 2. Rule number two says, "If you bought a stock with the intention of flipping it, then flip it!" Lots of traders make the mistake of thinking that the stock will keep flying and they might miss the move if they sell. However, unless the stock you bought to flip has significant news overnight, most likely the stock will gap open and then sell off a bit as traders sell the gap. This play is termed as "fading the gap" - trading opposite of the move. When flipping, you have to be disciplined in planning your trade and sticking with your plan. You can't get greedy if you want to "flip" successfully. One reason flipping a stock works so well is because the world tends to follow the US markets. When the US markets finish on the strong side, other foreign markets will normally have positive moves overnight. As a result, the next day we will often see the futures up before the open. This prompts many retail investors and amateur traders who don't want to miss the move to jump in with buy orders at the open, just as flippers are selling. This is obviously a very short term trading tactic that is best suited for traders who have access to the markets at the close of the current session, and the open of the following session. Keep in mind that flipping has its own set of risks, but if you stick to the rules and use good trading discipline, it can be very profitable. ======================================================================
Best of luck and have a Great Week!
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The RightLine Report is an information service for investors and traders. It is not a solicitation nor a recommendation or offer to buy or sell securities. The information provided is obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. The publishers of The RightLine Report are not brokers or financial advisors, and are not acting in any way to influence the purchase or sale of any security. Stock picks, entry points and exit points should be considered an information resource to assist the trader in developing a trading plan and it is the sole responsibility of the reader to conduct his or her own due diligence before executing a trade. Trading securities should be considered speculative with a high degree of volatility and risk. The publishers of The RightLine Report recommend that anyone trading securities should do so with caution, exercise prudent trading discipline and have a personal risk management strategy in place before doing so. It is possible at this or some subsequent date, the publishers and staff of The Pro Right Line Corp. may own, buy or sell securities presented. The Pro Right Line Corp. is not a financial advisory service. Its publishers, owners or investors, are not liable for any losses or damages, monetary or otherwise, that result from the content of The RightLine Report. Past RightLine Report performance may not be indicative of future performance. All subscriptions and/or use of the RightLine.net website are subject to RightLine's "Terms of Use" and "Subscriber Terms & Conditions" which are posted at www.rightline.net. Any REDISTRIBUTION of the above information, without The RightLine's written consent, is STRICTLY PROHIBITED. Copyright / The Pro Right Line Corporation - All Rights Reserved To Unsubscribe, send an email to cs@prorightline.com or call 1-312-248-4241. |