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June 2, 2022 - The RightLine Report
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NOTES FROM THE EDITOR
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Whipsaw market environments are inherently difficult to trade; their abrupt directional changes seem to come out of nowhere. During these types volatile of markets you can take a few steps to protect your capital - or better yet - reap some profits.
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"QUICK LIST"
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Stock 06/02 06/02 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
------ -------- -------- -------- -------- --------------- --------
GES 20.66 0.01 21.25 19.87 1.38/0.69 2.12
CRK 20.46 0.04 21.24 19.53 1.71/0.86 2.54
ZIM 66.37 2.06 68.51 6.59/3.3 8.28
INFA 20.85 0.59 21.23 19.53 1.7/0.85 2.74
AGR 47.56 0.28 48.29 3.24/1.62 2.04
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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The top stock indices were higher on Thursday as economic news included a larger drop than expected in unemployment claims, an upward revision in productivity and unit labor costs. In equities, Microsoft (MSFT $275) reduced its guidance due to the recent upsurge in the USD, onger-than-expected operating profits and showed sequential gross margin improvement, while Hewlett Packard Enterprise (HPE $15) fell short of earnings projections and dropped its profit outlook. Gold and oil prices were higher, treasuries were mixed, and the USD/dollar declined. Jun 1, 2022 Jun 2, 2022
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Dow 32,813.23 -176.89 33,248.28 435.05
Nasdaq 11,994.46 -86.93 12,316.90 322.44
S&P 500 4,101.23 -30.92 4,176.82 75.59
NYSE Volume 4.59B 4.44B
NYSE Advancers 1,341 2,486
NYSE Decliners 1,972 804
Nasdaq Volume 4.72B 4.43B
Nasdaq Advancers 1,623 3,497
Nasdaq Decliners 3,113 1,178
New Highs/Lows
05/26 05/27 05/30 05/31 06/01 06/02
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NYSE New Highs 87 88 0 105 52 64
NYSE New Lows 40 36 0 33 52 38
Nasdaq New Highs 32 49 0 64 30 33
Nasdaq New Lows 165 113 0 116 190 143
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TRADER'S TIP:
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TRADER'S TIP: "Moving Average Rainbows" Place a variety of moving averages on your chart, and watch how they crossover each other and fan out into a "rainbow." The patterns that are drawn as the trend unfolds will indicate the strength of a reversal. Try a 13, 22, and 50 period Exponential Moving Average first to see how it works. This combination has shown to be effective under a wide range of conditions. Take notice of any similarities in the rainbows that have occurred historically, with particular attention to the way the rainbow takes shape after bouncing from support or resistance. This is a helpful tool to avoid head fakes, and determine true trend reversals in almost any time frame. **************************
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 - 4176.82 June 2, 2022 52-Week High: 4818.62 52-Week Low: 3810.32 Daily Trend: UP Weekly trend: DOWN Weekly Pivot Levels Resistance 3: 4630.67 Resistance 2: 4347.31 Resistance 1: 4252.77 Pivot: 4063.95 Support 1: 3969.41 Support 2: 3780.59 Support 3: 3497.23 https://www.prorightline.com/rlch/060222SPX.jpg--ECONOMIC REPORTS AND EVENTS (all times are Eastern): Wednesday, June 01, 2022: 01-Jun 9:45 am S&P Global U.S. manufacturing PMI (final) 01-Jun 10 am ISM manufacturing index 01-Jun 10 am Job openings 01-Jun 10 am Quits 01-Jun 10 am Construction spending 01-Jun 2 pm Beige book 01-Jun Varies Motor vehicle sales (SAAR) Thursday, June 02, 2022: 02-Jun 8:30 am ADP employment report 02-Jun 8:30 am Initial jobless claims 02-Jun 8:30 am Continuing jobless claims 02-Jun 8:30 am Productivity revision (SAAR) 02-Jun 8:30 am Unit labor costs revision (SAAR) 02-Jun 10 am Factory orders 02-Jun 10 am Core capital goods orders revision Friday, June 03, 2022: 03-Jun 8:30 am Nonfarm payrolls 03-Jun 8:30 am Unemployment rate 03-Jun 8:30 am Average hourly earnings 03-Jun 8:30 am Labor-force participation, ages 25-54 03-Jun 9:45 am S&P Global U.S. services PMI (final) 03-Jun 10 am ISM services index 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: "Trading Discipline... What Exactly is it?" In trading, discipline simply means that we always perform a basic group of essential actions every time we put on a trade - no exceptions. The reason we do this? Because research and experience has taught us that certain tactics or "rules" give us a statistical edge over the market. When we consistently use these simple rules over an extended period of time, we are much more successful than when we don't use them, or only use them when we "remember" to. ***********************************
STOCKS COVERED IN THIS ISSUE
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CONSUMER CYCLICAL SECTOR Guess', Inc. (GES: Consumer Cyclical/Apparel Retail) - 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 GES. A move to the upside will trigger our BUY entry at 21.25, while a drop to 19.87 will trigger our SELL short entry. Follow your position with a 1.38 trailing stop. Tighten the stop to 0.69 once you have a 2.12 gain. GES closed Thursday at 20.66. Earnings Report Date: Aug 23, 2022. Beta: 1.91. Market-Cap: 1.235B. Optionable. ENERGY SECTOR Comstock Resources, Inc. (CRK: Energy/Oil & Gas E&P) - SQUEEZE PLAY. CRK 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. CRK is now at 20.46. We can capture price action either way by placing a BUY trigger at 21.24 and a SELL short trigger at 19.53. Once CRK 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 1.71. When you acquire a 2.54 profit, tighten the stop to 0.86. Earnings Report Date: Aug 01, 2022. Beta: 0.99. Market-Cap: 4.765B. Optionable. INDUSTRIALS SECTOR ZIM Integrated Shipping Services Ltd. (ZIM: Industrials/Marine Shipping) - BULLISH BOUNCE. This trader-friendly setup turns repetitive stock behavior into real profits. Based on the tendency for up-trending stocks to drop briefly and then resume the up-trend, the Bullish Bounce places traders into excellent stocks when conditions are primed for more skyward movement. ZIM's current price action near moving average support signals a potential BUY entry at 68.51, followed by a 6.59 trailing stop which can be tightened to 3.3 upon earning 8.28. ZIM closed Thursday at 66.37. Earnings Report Date: Aug 16, 2022. Beta: N/A. Market-Cap: 7.952B. Optionable. TECHNOLOGY SECTOR Informatica Inc. (INFA: Technology/Software-Infrastructure) - 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 INFA's case we will enter a BUY should it reach the 21.23 level, or a SELL short trade if it drops to 19.53. As usual a trailing stop is essential, 1.7 which should be tightened to 0.85 on a 2.74 gain. INFA closed Thursday at 20.85. Earnings Report Date: N/A. Beta: N/A. Market-Cap: 5.838B. Optionable. UTILITIES SECTOR Avangrid, Inc. (AGR: Utilities/Utilities-Regulated Electric) - BULLISH BOUNCE. AGR has charted an upward weekly trend until recently when sellers showed up to push prices lower. On Thursday the selling ran into solid support. A potential bounce up from this level should attract buyers and likely return AGR to the previously established uptrend. The Bullish Bounce set-up is the basis for our BUY entry, so be ready to go long on a rise to our trigger at 48.29. Set a trailing stop of 3.24, tightening to 1.62 on a 2.04 profit. AGR closed at 47.56 on Thursday. Earnings Report Date: Jul 26, 2022. Beta: 0.36. Market-Cap: 18.39B. 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 ---------------- ------- -------- ------- ------ ------- Amazon AMZN 3/9/2022 6/6/2022 20-for-1 Yes 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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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 800-737-4518. |