June 20, 2023 - The RightLine Report
Notes From The Editor
More About "The Trend" ...
Every trader and investor should learn to recognize price trends. Trend identification is a relatively simple yet very valuable skill you can use to enhance your trading profitability.
Most professionals use trendlines on a regular basis. Even market strategists at major brokerages and trading institutions use trendlines to locate trends that are emerging or are already underway.
If you are an experienced professional who is already very familiar with the power of trendlines, you can skip the next few paragraphs. However everyone else will certainly benefit from a quick review of this powerful method.
"Trading 101"
In a nutshell, a trend-line is simply a straight line drawn on a common price chart that connects a series of highs or lows. Learning to draw trendlines isn't complicated at all. In fact most charting packages include a trendline tool that makes learning this skill even easier.
Just take any price chart and notice the high points across the top. Imagine that the highs are peaks of a mountain range that you are viewing from a distance. Starting on the left side, draw a straight line across the top of the peaks so that only the two highest peaks are connected.
Is the direction of the line slanted upward? Is it slanted downward? If the line is up, then the mountain peaks are in an up-trend from left to right. If the line is headed down, then the trend is down.
Once the trend is identified, you can extend the line into the future. As price advances or declines in the days and weeks ahead, interaction with the established trendline will usually produce a reaction. This usually comes in the form of an initial short term reversal, with a follow up attempt to penetrate the trendline. If the breakthrough is successful, price will normally continue in that direction. If the trendline repels the attempt, you can expect the reversal to continue until another support or resistance level is reached.
Remember that the trend is your friend whether up or down. Also note that trends can and do change direction. To take advantage of the trend requires that we know how to trade with the trend, no matter which way it goes.
Everyone knows how to trade an UP-trend; we buy! But buying in a DOWN- trend is usually a big mistake. So what do we do? One alternative is to use the market technique of "shorting."
Commonly referred to as "selling short," this learned skill allows traders and investors to trade with the trend when it is moving down. Without going into all of the details, shorting is a simple way to hop on the down-elevator to get to the right floor. When markets or individual stocks are trending lower, the RightLine Report will introduce short plays to take advantage of what the market is giving at the moment.
If the trend is down it makes no sense to try to swim upstream. However, some investors are not comfortable with the strategy of selling short. They can still avoid substantial losses during downtrends by learning from our short plays, moving their resources into cash and waiting for the time when market conditions improve.
Trade well!
- Thomas Sutton, Editor
Note: For a more in-depth look at Trends, click on this link: https://prorightline.com/index.php/2019/07/17/stock-charts-trends/
Stocks Covered Today Stock Splits
Quick List
Stock 06/20 06/20 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
------ -------- -------- -------- -------- --------------- --------
FET 25.52 0.14 25.91 2.18/1.09 2.22
GOCO 20.19 0.40 20.71 18.79 1.92/0.96 3.66
SBCF 22.90 0.05 23.22 21.72 1.5/0.75 2.28
BLFS 24.12 0.50 24.67 2.64/1.32 2.52
KYMR 25.19 -0.67 26.11 24.07 2.04/1.02 2.72
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" 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
Equity markets began the holiday shortened week on a downward trajectory, experiencing a slight retreat on Tuesday following a robust performance the previous week, which marked the S&P 500's fifth consecutive week of gains. The session remained uneventful in terms of economic data and news headlines, maintaining the market's focus on the underlying Federal Reserve policy. Interest rates exhibited a minor decline, with 10-year Treasury yields dipping below 3.75%.
Most sectors concluded the day in negative territory, with energy and materials suffering the largest declines due to a drop in commodity prices. Given the absence of fresh developments or prevailing themes influencing market direction, it is unsurprising to observe some weakness at the beginning of the week. The recent remarkable surge in equities, which saw the S&P 500 up by over 7% in the past month alone prior to Tuesday, further contributes to this softness.
Federal Reserve Chair Powell is scheduled to appear before Congress on Wednesday and Thursday to deliver his semiannual testimony on monetary policy. Although we do not anticipate any new policy announcements to arise from this testimony, it will provide an opportunity for the market to gain further insights into the Fed's perspectives on inflation, the state of the economy, and the decision to maintain interest rates at the June meeting.
The Fed's recent decision can be characterized as a "hawkish pause," as it opted to keep rates unchanged, ending a period of aggressive tightening, while signaling the likelihood of future rate hikes. We anticipate that this week's testimony will shed light on the factors the Fed is monitoring to guide its future actions. While we don't expect any significant market reactions, stock prices are likely to be sensitive to the Fed's comments in the upcoming weeks as expectations regarding future rate decisions are adjusted.
Jun 19, 2023 Jun 20, 2023
-------------------- --------------------
Dow Closed 0 34,053.87 -245.25
Nasdaq Closed 0 13,667.29 -22.28
S&P 500 Closed 0 4,388.71 -20.88
NYSE Volume 0 4.06B
NYSE Advancers 0 954
NYSE Decliners 0 2,025
Nasdaq Volume 0 5.25B
Nasdaq Advancers 0 1,695
Nasdaq Decliners 0 2,774
New Highs/Lows
06/13 06/14 06/15 06/16 06/19 06/20
--------------------------------------------
NYSE New Highs 137 118 104 145 0 69
NYSE New Lows 8 18 22 15 0 19
Nasdaq New Highs 223 185 189 217 0 91
Nasdaq New Lows 71 89 84 79 0 100
Stocks Covered Today Stock Splits
TRADER'S TIP: "Making Decisions Builds Confidence"
Each time we enter or exit a trade we make a decision. Every decision we make causes us to grow - IF we give our experiences the value they deserve. However, if we short-change ourselves for not always making "perfect" choices and view our experiences as "mistakes" our confidence will go down instead of up.
Just remember that trading conditions are rarely optimum, and we're always making decisions under less than ideal circumstances. Give yourself a break, knowing that only YOU can set the proper value for each experience you have. Be sure you make the right choice. Build your confidence and never value any trade or other experience as worthless.
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 - 4388.71 June 20, 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
NASDAQ Composite - 13667.29 June 20, 2023
52-Week High: 13864.06
52-Week Low: 10088.83
Daily Trend: UP
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 14741.69
Resistance 2: 14180.21
Resistance 1: 13934.89
Pivot: 13618.73
Support 1: 13373.41
Support 2: 13057.25
Support 3: 12495.77
Dow Industrials - 34053.87 June 20, 2023
52-Week High: 34712.28
52-Week Low: 28660.94
Daily Trend: UP
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 35834.04
Resistance 2: 35028.91
Resistance 1: 34664.01
Pivot: 34223.78
Support 1: 33858.88
Support 2: 33418.65
Support 3: 32613.52
Stocks Covered Today Stock Splits
Market Calendar
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
Stocks Covered Today Stock Splits
TRADER'S TIP: "Trader Tax Status"
"Trader tax status" is the IRS designation allowing traders to benefit from a number of positive tax rules. Quite a few of these rules are activated by "Mark-To-Market" accounting procedures. For example, Mark- To-Market converts capital losses - that can only be deducted against capital gains - into ordinary losses that can be deducted against ALL types of income. Be sure to check with your tax accountant for details.
Stocks Covered in This Issue
ENERGY SECTOR
Forum Energy Technologies, Inc. (FET: Energy/Oil & Gas Equipment & Services) - BULLISH BOUNCE. The charts for FET 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 25.91, and follow your entry with a trailing stop of 2.18. Tighten it to 1.09 when a 2.22 profit is reached. FET ended the latest session at 25.52. Earnings Report Date: Aug 02, 2023. Beta: 2.82. Market-Cap: 259.015M. Optionable.
FINANCIAL SERVICES SECTOR
GoHealth, Inc. (GOCO: Financial Services/Insurance Brokers) - SQUEEZE PLAY. Sometimes when Bulls and Bears face off in the market arena for a typical day-long battle, there is no clear winner. This is evident when the daily price range contracts to an unusually narrow state. GOCO found itself in this condition on Tuesday when neither buyers or sellers were able to push ahead. This setup provides traders a chance to hop on board the next breakout - whether it's to the upside or down - with little risk of loss. To do this place a BUY order at 20.71 and a SELL short trigger at 18.79. When GOCO moves outside of Tuesday's range, one of the orders will be filled. Once you hold a position of shares, cancel the unfilled order and place a 1.92 trailing stop. After you've got a 3.66 profit, tighten the stop to 0.96. GOCO closed at 20.19 on Tuesday. Earnings Report Date: Aug 14, 2023. Beta: 2.03. Market-Cap: 4.34B. Optionable.
Seacoast Banking Corporation of Florida (SBCF: Financial Services/Banks-Regional) - SQUEEZE PLAY. SBCF shareholders know what it feels like to be squeezed. Tuesday's slim price range reveals uncertainty on both sides of the table, a situation which often resolves itself by either Bears or Bulls quickly gaining a clear advantage. The question is "who will win?" Near-term market action tell us whether we should sell short or we should buy shares instead. SBCF closed Tuesday at 22.90. The plan is to enter in the right direction by placing a BUY trigger at 23.22 and a SELL short trigger at 21.72. Once SBCF establishes direction, place your triggered order. As soon as you are in the trade, place a trailing stop in the amount of 1.5. After you've collected a 2.28 profit, tighten the stop to 0.75. Earnings Report Date: Jul 26, 2023. Beta: 1.08. Market-Cap: 1.938B. Optionable.
HEALTHCARE SECTOR
BioLife Solutions, Inc. (BLFS: Healthcare/Medical Instruments & Supplies) - BULLISH BOUNCE. BLFS's positive weekly uptrend is still intact despite recent selling that has driven share prices lower. Price action on Tuesday shows that traders are aware of the moving average support zone now in play, and they are ready to consider buying again. A shift up from this point will attract even more buyers. The new buying should move BLFS back in step with the bullish weekly trend, so our BUY entry trigger is set at 24.67. Once you hold a position, trail a stop of 2.64. Tighten it to 1.32 on a 2.52 gain. BLFS closed at 24.12 on Tuesday. Earnings Report Date: Aug 07, 2023. Beta: 1.79. Market-Cap: 1.049B. Optionable.
Kymera Therapeutics, Inc. (KYMR: Healthcare/Biotechnology) - SQUEEZE PLAY. The ticker for Tuesday's session shows KYMR is now stuck in a tight price band. With the cyclical contraction and expansion nature of volatility in force, we should see a new period of price expansion in the days ahead. To improve the odds of catching the next directional wave, place a BUY trigger at 26.11 and a SELL short trigger at 24.07. When KYMR starts moving out of its narrow range, your order will be triggered. Once you're in the trade, cancel the opposing trigger and set a 2.04 trailing stop. Upon reaching a 2.72 profit, resize the stop to 1.02. Earnings Report Date: Aug 07, 2023. Beta: 1.72. Market-Cap: 1.393B. 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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