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June 29, 2024 - The RightLine Report
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NOTES FROM THE EDITOR
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Successful online trading is often complicated by bad advice. Unfortunately there is quite a bit of blatantly harmful trading guidance on the Internet. Some of this rhetoric has been repeated so many times it's even taken on a life of it's own. During the next few weeks we'll take a look at several "Stock Market Trading Myths" that are widely circulated. Today let's consider some pros and cons of trading stocks posted in online chat rooms and forums.
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"QUICK LIST"
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Stock 06/28 06/28 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
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GIL 37.92 0.01 38.59 2.14/1.07 2
CTRN 21.26 -0.47 20.56 1.55/0.78 2.58
NRIX 20.87 0.13 21.21 2.05/1.03 1.72
SYRE 23.51 0.80 24.27 21.64 2.63/1.32 5.52
ZIM 22.17 0.45 22.92 21.1 1.82/0.91 2.88
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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Major equity indexes ended Friday lower, with large-cap stocks trailing small and mid-cap stocks. Sector performance was mixed, with real estate and energy leading gains, while communication services and consumer discretionary sectors lagged behind. In global markets, Asia saw gains due to stronger-than-expected growth in Japan's industrial production, up 2.8%. Conversely, Europe experienced broad declines as investors assessed new inflation data. The U.S. dollar modestly depreciated against major currencies. In commodities, both WTI oil and gold traded lower. Key inflation measures showed a decline. The core personal consumption expenditure (PCE) price index, excluding food and energy, rose 2.6% year-over-year through May, meeting expectations and down from 2.8% the previous month. Headline PCE also matched estimates at 2.6% over the past 12 months, compared to 2.7% previously. Consumption expenditures rose 0.2%, slightly up from April's 0.1%, indicating cautious consumer spending. Despite core PCE remaining above the Fed's 2% target, we anticipate inflation will continue moderating in the latter part of the year, driven by reduced shelter inflation and slower wage growth. Market-based measures indicate slower housing cost increases than government measures like CPI and PCE. Labor market indicators also suggest a gradual cooling, with fewer job openings and a slight increase in unemployment. Bond yields increased, with the 10-year Treasury yield at approximately 4.39%. Bond markets are pricing in expectations for two Fed rate cuts this year following the PCE report, which confirmed a slowdown in inflation aligned with forecasts. We expect ongoing signs of inflation moderation to maintain the Fed's path towards one or two rate cuts later in the year, which would be supportive for both the economy and broader markets. Friday On The Week
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Dow 39,118.86 -45.20 -31.47 -0.08%
Nasdaq 17,732.60 -126.08 +43.24 0.24%
S&P 500 5,460.48 -22.39 -4.14 -0.08%
NYSE Volume 7.71B
NYSE Advancers 1,660
NYSE Decliners 1,154
Nasdaq Volume 9.34B
Nasdaq Advancers 2,299
Nasdaq Decliners 1,992
New Highs/Lows
06/21 06/24 06/25 06/26 06/27 06/28
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NYSE New Highs 40 90 59 48 80 134
NYSE New Lows 51 27 60 62 46 43
Nasdaq New Highs 46 71 68 68 73 104
Nasdaq New Lows 183 138 198 183 127 155
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TRADER'S TIP:
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TRADER'S TIP: "Free Advice From TV Talking Heads" When it comes to financial advice, always remember that the brokerage firms who pay the advisors make most of their money from commissions on stock sales. It may only be a few bucks for each transaction, but it adds up to hundreds of billions of dollars. Though many analysts are well intended, a major purpose of their stock picks is to attract customers and generate order flow. Whether the recommendations are profitable or not really isn't that important - the companies make money whenever someone buys or sells shares. **************************
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/ https://www.prorightline.com/rlch/062824SPX.jpg--ECONOMIC REPORTS AND EVENTS (all times are Eastern): MONDAY, JULY 1 9:45 am S&P final U.S. manufacturing PMI 10:00 am Construction spending 10:00 am ISM manufacturing TUESDAY, JULY 2 TBA Auto sales June 10:00 am Job openings May WEDNESDAY, JULY 3 8:15 am ADP employment 8:30 am Initial jobless claims 8:30 am U.S. trade deficit 9:45 am S&P final U.S. services PMI 10:00 am Factory orders 10:00 am ISM services 2:00 pm Minutes of Fed's June FOMC meeting THURSDAY, JULY 4 None scheduled, July 4 holiday FRIDAY, JULY 5 8:30 am U.S. employment report 8:30 am U.S. unemployment rate 8:30 am U.S. hourly wages 8:30 am Hourly wages year over year 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: "Setting Stops For Long Positions" Here are a few suggestions on how to set stops for long (buy) positions. 1. Set the stop just under yesterday's low unless yesterday was a big up day. Then move the stop closer to today's open. 2. Set the stop just under a recent minor support level. 3. Use the Average True Range - ATR - to determine the expected movement for the stock in the time frame you trade, and set the stop to a reasonable distance beyond the range amount. (ATR is a feature found in RightLine Charts.) 4. Set the stop the instant your buy order gets filled. 5. Move stops up as the stock rises, first to break even, then to protect profits. On a long position when you use trailing stops, don't lower stops - only raise them. 6. As the stock moves up and tends to "top out" or market conditions become unfavorable, "tighten the stop." In other words, move your stop closer to the current market price. Doing this will effectively employ an "up or out" strategy" - either the price goes up, or you are out of the trade. ***********************************
STOCKS COVERED IN THIS ISSUE
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CONSUMER CYCLICAL SECTOR Gildan Activewear Inc. (GIL: Consumer Cyclical/Apparel Manufacturing) - BULLISH BOUNCE. Up-trending stocks like GIL have a tendency to bounce their way skyward rather than travel higher in a straight line. After touching down to a moving average support level on Friday, GIL is poised to lift off again. To take advantage of this setup, prepare to BUY shares at 38.59 if positive price action occurs. As always, follow your entry with a trailing stop. A 2.14 trailer should work well with GIL. Tighten it to 1.07 on a 2 gainer. Earnings Report Date: Aug 1, 2024. Beta: 1.65. Market-Cap: 6.393B. Optionable. Citi Trends, Inc. (CTRN: Consumer Cyclical/Apparel Retail) - BEARISH U-TURN. CTRN's chronic decline over the past weeks was relieved by a recent upward bounce that has boosted hope for weary shareholders. Unfortunately for them, Friday's price action near moving average support indicates the bullish rebound may be over. If this turns out to be the case, short-sellers can enter a SELL position at 20.56. Control risk with a 1.55 stop that can be resized to 0.78 on a gain of 2.58. CTRN closed at 21.26 on Friday. Earnings Report Date: Aug 20, 2024. Beta: 2.38. Market-Cap: 182.736M. Optionable. HEALTHCARE SECTOR Nurix Therapeutics, Inc. (NRIX: Healthcare/Biotechnology) - BULLISH BOUNCE. If you are looking for another bouncer with profits in mind, NRIX fits the bill. Shares have been in retreat-mode lately, but now this stock is in the process of bouncing from support. Currently priced at 20.87, plan to buy shares at 21.21 and use a 2.05 trailing stop. Tighten the stop to 1.03 on a 1.72 gain. Earnings Report Date: Jul 11, 2024. Beta: 2.17. Market-Cap: 1.274B. Optionable. Spyre Therapeutics, Inc. (SYRE: Healthcare/Biotechnology) - SQUEEZE PLAY. Friday's trading session left SYRE in a very narrow price range after buyers and sellers fought to a near stalemate. Both sides are looking for some traction, and a breakout either way could provide a nice gain in the short term. To get aboard, set your BUY trigger at 24.27 and your SELL short trigger at 21.64. One of the orders will be triggered by upcoming price action. When your market order is filled, cancel the remaining trigger and enter a 2.63 trailing stop. Once you have a 5.52 profit, reduce the stop to 1.32. Earnings Report Date: Aug 9, 2024. Beta: 2.96. Market-Cap: 1.194B. Optionable. INDUSTRIALS SECTOR ZIM Integrated Shipping Services Ltd. (ZIM: Industrials/Marine Shipping) - SQUEEZE PLAY. The ticker for Friday's session shows ZIM 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 22.92 and a SELL short trigger at 21.1. When ZIM 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 1.82 trailing stop. Upon reaching a 2.88 profit, resize the stop to 0.91. Earnings Report Date: Aug 12, 2024. Beta: 1.78. Market-Cap: 2.668B. 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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Intra-day Traders: "Unlock The Secrets Of The Ticker Tape" Many good traders lose money because of tape-reading incompetence. After all, the markets are little more than a set of numbers and their rate of change over time. Watching how these numbers interact offers traders a precise method for short-term prediction. It works because the flow of the tape reveals the crowd's intentions. Technical analysis alone won't make you a profitable trader. You still need to learn the fine art of reading the tape. That could be a shock after all of the time you've spent studying the charts and probing the indicators. Of course you can continue to trade without the tape, but you do so at your own risk. Charts often paint pretty pictures that trigger perfectly wrong signals, but the tape never lies. This goes back to the old admonition to trade what you see, not what you believe. Once you learn how to read the tape, it becomes much harder to get fooled by the whipsaws that are tossing other traders around. The bottom line is that price and volume provide most of the information needed to play the markets successfully. The flow of buying and selling pressure reveals forces that remain hidden on the charts and in the news flow. It reflects the real activities of market players, as opposed to the smoke and mirrors being offered to the public. Mastering the ticker tape is tough, because there's no definitive book or formula on the subject. It can only be learned through long periods of personal observation. But once you develop your tape-reading skills, you'll have a lifetime advantage over other traders, because you're accessing the hidden pulse of the markets. Here are 15 tricks to learning the secrets of the ticker tape. 1. Start your education by memorizing key levels on your favorite charts. Then watch the tape closely when price approaches these pivot points. Record your observations and see if you can predict reversals before the crowd does. 2. Most tape signals help you anticipate the unexpected. For example, a bull trap is set when volume dries up for no reason after a breakout. The tape reader has the advantage, because this occurs long before a reversal shows up on the chart. 3. Study the tape with one eye on the clock, because swings tend to occur in predictable cycles. For example, watch for the "third bar reversal" about 11 minutes into the new day. Follow the tape in whatever direction price moves at the open, then see if momentum fades at the critical time. 4. Interpret the crowd's excitement level with an average volume reading next to the real-time volume on your watch list. Look for stocks that trade well above their average volume, because this is where the real action will be for the day. 5. Look for divergences between market sentiment and the tape flow. Are interested buyers holding up prices in the middle of a broad selloff? Or do the rally fires fizzle when everything else is moving higher? 6. Ask if price action matches your expectations. Look for buyers at breakout levels and sellers at breakdown levels. When they don't show up, stand aside or fade the move. Don't be patient. Contrarians step in immediately when the crowd doesn't appear at price pivots. 7. Market makers and specialists use knowledge of the order book to move markets in whatever direction yields the greatest volume. They routinely manipulate crowd emotions against order flow to shake weak hands out of positions. 8. Use Nasdaq Level II as a contrary indicator. Its purpose is to fool the public into making bad decisions. The best feedback from this tool comes when you see a few shares hold a market up or down for extended periods. It means someone important is hiding a large order. 9. Ignore the players who are lined up on either side of the spread, and track only the depth of their interest through many tiers. Pay attention to whoever steps in to fill the gap when the spread opens more than a few cents. That's the highly motivated player who will most likely move the market. 10. Get out of the way when NYSE specialists show big size on one side of the market. They intend to push price through many tiers until their orders gets filled. Alternatively, scalpers can trade with size until it works out of the system. 11. Use the opening price principle. The opening tick on the SP 500 futures remains a pivot number through the entire session. Draw a line across it to remind yourself where it is. Then use opening price breakouts, breakdowns and reversals as trading signals. 12. Closely watch the relationship between current price and the daily range. A stock that holds high within its range has hidden strength, while a stock that holds low has hidden weakness. 13. Interpreting the bid/ask spread requires a different skill-set than reading price. Keep in mind that most spread movement is pure noise. Watch for those few times when the spread widens and price surges farther on fewer shares. That's where directional signals will appear. 14. Follow the professionals in quiet times and the public in wild times. Insiders push price in the direction that sets up their accounts for the most gain, but they lose control of the tape when the public enters the market in force. 15. Keep one eye on market breadth and exchange tick, and the other on the ticker tape. Interrelationships between these forces generate convergence and divergence that predict market direction. *************** This special guest article was written by Alan Farley, author of "The Master Swing Trader." ======================================================================
Best of luck and have a Great Week!
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DISCLAIMER
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. |