June 7, 2022 - The RightLine Report 

 
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                      NOTES FROM THE EDITOR
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I remember several years ago when three mountain bikers were air lifted to safety in a rescue helicopter after getting lost in the San Bernardino National Forest. The next day they decided to go back into the woods and get their bicycles. Unfortunately, the three young men got lost and had to be rescued ... again!

Although this sort of behavior may seem bizarre, it's quite common among traders and investors. No, we rarely get lost in the woods twice in twenty-four hours, yet many of us continue to repeat the same mistakes over and over again. When it comes to trading the markets, losing money rarely results from what others do to us. Problems usually come up because of what we do to ourselves.

I suppose we all have blind spots in our trading field of vision - things that we just don't see because of our psychological makeup. Most new traders have little or no training in the markets, yet still expect to be successful without anyone to guide them. Experienced traders know that rules are important, so we set rules and then we break them.

The reasons for "dim-witted" behavior are embedded deep in our brains. Today's actions are largely the result of early childhood conditioning that established habits and beliefs long before we even knew what they were. As young children we were unaware to how silly we probably looked to our older friends and family when we tried to avoid responsibility for our actions.

It always seemed like a good idea at the time, though now we can see that maybe it wasn't. In the same way, our current trading behavior always seems the right thing to do - at least at the time we do it.

"Oh, the market did that to me" is just another way of saying "I'm a big part of the reason it happened." Have you ever noticed how most investors are reluctant to admit that they are responsible for their losses, yet they seem proud of their gains?

At first glance it seems natural to be ashamed of our mistakes and proud of our accomplishments. However, our blunders usually teach us much more than our achievements - if we are willing to learn from them. The only truly bad mistakes are the ones that we deny. It takes courage to own up to them, much less accept them as valuable learning experiences to be embraced.

The good news is that we can change our old habits and beliefs by taking responsibility - even when it hurts. A trading mistake can cost quite a bit in terms of cash, so it's always wise to get at least the same amount of value in experience. Just remember that bad judgment leads to experience, and experience leads to good judgment.

Trade well!

~ Thomas Sutton, Editor 

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                           "QUICK LIST"
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Stock     06/07     06/07      Buy      Short   Trailing Stops     Gain 
Symbol    Price      +/-      Entry     Entry   Initial/Tighten   Amount 
------  --------  --------  --------  --------  ---------------  --------

T         21.12      0.18     21.46                  1.32/0.66      0.94
DRQ       32.13      1.17     32.71                  3.16/1.58      3.58
CRK       21.48      0.43     21.81     20.14        1.67/0.84       2.5
MTR       22.02      0.28      22.5     20.85        1.65/0.83      3.36
UHT       52.82      1.00     53.53                  3.76/1.88         3


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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US stocks were higher on Tuesday despite concerns over persistent inflation and the possibility of economic slowdown due to the Fed Bank's hawkish monetary policy. In equities, Dave & Buster's (PLAY $39) moved higher after the entertainment company topped quarterly earning estimates, while shares of Target (TGT $156) declined after the retailer cut its margin guidance due to planned inventory reductions and sluggish sales. In economic news, consumer credit dropped a bit as credit card debt edged down from a two-decade high. Oil prices and gold advanced higher, treasuries were mixed, and the USD/dollar finished lower.


                       Jun 6, 2022            Jun 7, 2022    
                  --------------------   --------------------
Dow                 32,915.78    16.08     33,180.14   264.36
Nasdaq              12,061.37    48.64     12,175.23   113.86
S&P 500              4,121.43    12.89      4,160.68    39.25

NYSE Volume                      4.37B                   4.4B
NYSE Advancers                   1,798                  2,270
NYSE Decliners                   1,455                  1,029

Nasdaq Volume                    4.64B                  4.46B
Nasdaq Advancers                 2,327                  2,950
Nasdaq Decliners                 2,366                  1,760

                                 New Highs/Lows

                   05/31  06/01  06/02  06/03  06/06  06/07
                 --------------------------------------------
NYSE New Highs       105     52     64     50     83     98
NYSE New Lows         33     52     38     25     54     66
Nasdaq New Highs      64     30     33     37     66     55
Nasdaq New Lows      116    190    143    136    201    180

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                              TRADER'S TIP:  
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TRADER'S TIP: "Breakouts . . . Too Late?"

Most traders believe they're too late when they find a breakout that has already taken off and left them at the station. In reality, they usually have plenty of time to get in. Instead of chasing after the crowd, it's often best for traders to wait until the stock reverses and returns back to near the initial breakout level. Pullback entries are much safer than chasing. They eliminate the pain of head fakes and normally provide just as much of a profit ride if the breakout turns out to be genuine. 
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                         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 - 4160.68 June 7, 2022

52-Week High: 4818.62
52-Week Low: 3810.32
Daily Trend: UP
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 4327.28
Resistance 2: 4223.62
Resistance 1: 4166.08
Pivot: 4119.96
Support 1: 4062.42
Support 2: 4016.30
Support 3: 3912.64
https://www.prorightline.com/rlch/060722SPX.jpg

NASDAQ Composite - 12175.23 June 7, 2022

52-Week High: 16212.23
52-Week Low: 11035.69
Daily Trend: UP
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 12989.79
Resistance 2: 12526.51
Resistance 1: 12269.62
Pivot: 12063.23
Support 1: 11806.34
Support 2: 11599.95
Support 3: 11136.67


Dow Industrials - 33180.14 June 7, 2022

52-Week High: 36952.65
52-Week Low: 30635.76
Daily Trend: UP
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 34419.64
Resistance 2: 33656.73
Resistance 1: 33278.21
Pivot: 32893.82
Support 1: 32515.30
Support 2: 32130.91
Support 3: 31368.00


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                             MARKET CALENDAR
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--ECONOMIC REPORTS AND EVENTS (all times are Eastern): 
Monday, June 06, 2022:
06-Jun          None scheduled

Tuesday, June 07, 2022:
07-Jun  8:30 am   Foreign trade balance
07-Jun   3 pm   Consumer credit

Wednesday, June 08, 2022:
08-Jun  10 am   Wholesale inventories revision

Thursday, June 09, 2022:
09-Jun  8:30 am   Initial jobless claims
09-Jun  8:30 am   Continuing jobless claims
09-Jun  12 noon   Real household net worth (SAAR)
09-Jun  12 noon   Real domestic nonfinancial debt (SAAR)

Friday, June 10, 2022:
10-Jun  8:30 am   Consumer price index (monthly)
10-Jun  8:30 am   Core CPI (monthly)
10-Jun  8:30 am   CPI (year-over-year)
10-Jun  8:30 am   Core CPI (year-over-year)
10-Jun  10 am   UMich consumer sentiment index (preliminary)
10-Jun  10 am   5-year inflation expectations (preliminary)
10-Jun   2 pm   Federal budget balance

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: "Charts Reveal Emotions"

A stock price chart is an expression of trader and investor emotions, with fear and greed at opposite poles. Fear is generally a much stronger emotion than greed, and the reason that markets tend to go down faster than they go up. 

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                      STOCKS COVERED IN THIS ISSUE    
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COMMUNICATION SERVICES SECTOR

AT&T Inc. (T: Communication Services/Telecom Services) - BULLISH BOUNCE. Entering a position in the early stages of a bounce is great way to get on board an up-trending stock. The "Bullish Bounce" setup identifies probable candidates by evaluating the trading action that takes place near support levels. T's behavior on Tuesday could very well be a sign that a new bounce is underway. Place a BUY trigger at 21.46. In the event your trigger is met, also place a 1.32 trailing stop which can be trimmed down to 0.66 when you have a 0.94 profit. T closed Tuesday at 21.12. Earnings Report Date: Jul 21, 2022. Beta: 0.73. Market-Cap: 151.198B. Optionable.

ENERGY SECTOR

Dril-Quip, Inc. (DRQ: Energy/Oil & Gas Equipment & Services) - BULLISH BOUNCE. Another bullish bouncer, DRQ appears ready to resume trading in an uptrend after recent selling forced the stock lower for several days. Tuesday's positive price action near Moving Average support says it's time to BUY shares if DRQ reaches our entry trigger set at 32.71. Also place a 3.16 trailing stop which can be narrowed to 1.58 when you reach a 3.58 profit. DRQ closed Tuesday at 32.13. Earnings Report Date: Jul 27, 2022. Beta: 1.18. Market-Cap: 1.109B. Optionable.

Comstock Resources, Inc. (CRK: Energy/Oil & Gas E&P) - 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. CRK 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 21.81 and a SELL short trigger at 20.14. When CRK 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 1.67 trailing stop. After you've got a 2.5 profit, tighten the stop to 0.84. CRK closed at 21.48 on Tuesday. Earnings Report Date: Aug 01, 2022. Beta: 0.98. Market-Cap: 5.003B. Optionable.

Mesa Royalty Trust (MTR: Energy/Oil & Gas E&P) - SQUEEZE PLAY. MTR 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. MTR closed Tuesday at 22.02. The plan is to enter in the right direction by placing a BUY trigger at 22.5 and a SELL short trigger at 20.85. Once MTR establishes direction, place your triggered order. As soon as you are in the trade, place a trailing stop in the amount of 1.65. After you've collected a 3.36 profit, tighten the stop to 0.83. Earnings Report Date: N/A. Beta: 0.59. Market-Cap: 41.036M. Not Optionable.

REAL ESTATE SECTOR

Universal Health Realty Income Trust (UHT: Real Estate/REIT-Healthcare Facilities) - BULLISH BOUNCE. Positive price behavior near moving average support on Tuesday qualifies UHT for a Bullish Bounce setup. After several sessions of declining prices, UHT should soon begin trading in step with its established weekly uptrend. Tell your broker to BUY shares if UHT moves up to our entry trigger set at 53.53. You can also enter a 3.76 trailing stop, to be replaced with a 1.88 trailing stop when you obtain a 3 profit. UHT closed Tuesday at 52.82. Earnings Report Date: Jul 25, 2022. Beta: 0.82. Market-Cap: 728.192M. 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/ 

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                           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/ 
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