June 9, 2022 - The RightLine Report
Notes From The Editor
Trading stocks successfully is in many ways based on repetitive events. For example, the constant fluctuations in price open windows of opportunity. It is within this never ending movement - whether up or down - that traders find profits.
One way to access these windows is to anticipate support and resistance levels where prices are most likely to either reverse or accelerate. These critical levels provide reasonably safe entry points. This is because entering positions near support or resistance zones delivers a larger slice of the profit pie when the trade is favorable, and a quick small loss when it isn't.
We often emphasize that before entering a trade you should carefully consider exactly what you will do and when you will do it once you are in the position. This thoughtful consideration is to be done in advance of entering a trade, and in fact is much more important than finding the "perfect" stock or entry.
When evaluating your "what" and "when" course-of-action, always include an exit plan for three possible scenarios. The first is to be used if the trade moves favorably, the second is used if the trade moves unfavorably, and the third is used if it doesn't move at all. Remember that your exit plan is in place BEFORE entering a trade. Pay attention to details and be sure to include the specific exit price when planning your stop-losses.
Also, when using the trailing stop method to lock in gains make certain that you know in advance the exact point you will adjust your trailing stop. Again, it's very important that you write down your exit plan specifics BEFORE you get in.
Here's to profits,
Thomas Sutton, Editor
Stocks Covered Today Stock Splits
Quick List
Stock 06/09 06/09 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
------ -------- -------- -------- -------- --------------- --------
TGLS 21.11 -0.09 20.37 1.54/0.77 2.7
CHUY 22.10 -0.85 21.34 1.88/0.94 2.56
BLMN 20.54 -0.30 19.75 1.6/0.8 2.56
RGNX 21.80 -0.86 22.91 21.1 1.81/0.91 3.12
DV 22.75 -0.03 23.38 21.65 1.73/0.87 3.66
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
Stocks were lower on Thursday as the market continues to wrestle with the implications of chronic inflation pressures and an aggressive Fed monetary policy tightening campaign. The only item of interest on the econmic calendar was new unemployment claims, which accelerated more than predicted. In equity headlines, Signet Jewelers Limited (SIG $68) beat earnings estimates and issued favorable guidance, while value retailer Five Below (FIVE $134) fell short of revenue estimates and lowered its outlook. Gold and oil prices were lower, treasuries were mixed and the USD/dollar moved higher.
Jun 8, 2022 Jun 9, 2022
-------------------- --------------------
Dow 32,910.90 -269.24 32,272.79 -638.11
Nasdaq 12,086.27 -88.96 11,754.23 -332.05
S&P 500 4,115.77 -44.91 4,017.82 -97.95
NYSE Volume 4.18B 4.19B
NYSE Advancers 839 553
NYSE Decliners 2,373 2,760
Nasdaq Volume 4.73B 5.41B
Nasdaq Advancers 1,977 1,229
Nasdaq Decliners 2,595 3,422
New Highs/Lows
06/02 06/03 06/06 06/07 06/08 06/09
--------------------------------------------
NYSE New Highs 64 50 83 98 91 12
NYSE New Lows 38 25 54 66 51 111
Nasdaq New Highs 33 37 66 55 50 25
Nasdaq New Lows 143 136 201 180 124 177
Stocks Covered Today Stock Splits
TRADER'S TIP: "That Extra Something . . ."
The ability to relax emotionally and mentally when trading is usually associated with bull markets. And while we all love bullish market conditions, it's best to connect our positive emotions about trading to something more reliable than just upward market movement. Knowing that we can engage the stock market profitably in any environment provides that "something."
Belief, confidence, or whatever you want call it, the conviction that comes from experience and preparation is far more powerful than any bull. Why? Because bull markets don't last forever. What they give, the bear usually takes back - both in dollars and peace of mind. However, bears can't take away your money OR your confidence when it is based on sound trading principles and a realistic belief in your ability to be successful. This is true regardless of the current market trend.
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 - 4017.82 June 9, 2022
52-Week High: 4818.62
52-Week Low: 3810.32
Daily Trend: DOWN
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
NASDAQ Composite - 11754.23 June 9, 2022
52-Week High: 16212.23
52-Week Low: 11035.69
Daily Trend: DOWN
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 - 32272.79 June 9, 2022
52-Week High: 36952.65
52-Week Low: 30635.76
Daily Trend: DOWN
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
Stocks Covered Today Stock Splits
Market Calendar
ECONOMIC REPORTS AND EVENTS (all times are Eastern): 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 Monday, June 13, 2022: 06-Jun None scheduled Tuesday, June 14, 2022: 07-Jun 8:30 am Foreign trade balance 07-Jun 3 pm Consumer credit Wednesday, June 15, 2022: 08-Jun 10 am Wholesale inventories revision 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: "Strong as Steel, Slow as Molasses"
Two of the strongest forms of trending price action are up trends and down trends that slowly inch along without any counter-trend reactions of any magnitude. This is easy to see on charts in any time frame - minutes, hours, days, weeks, or months.
Stocks Covered in This Issue
BASIC MATERIALS SECTOR
Tecnoglass Inc. (TGLS: Basic Materials/Building Materials) - BEARISH U-TURN. Shares of TGLS have experienced the pain of selling pressure for a while, yet a recent bounce has given shareholders some welcome yet perhaps temporary relief. On Thursday the upward bounce ran into a brick wall at a Moving Average. TGLS now appears ready to head lower again. A continuation of this bearish reversal would signal a retracement of the recent gains, so prepare for SHORT entries at 20.37, using a 1.54 stop. Tighten to 0.77 on a gain of 2.7. Thursday's closing tick was 21.11. Earnings Report Date: Aug 04, 2022. Beta: 1.81. Market-Cap: 1.006B. Optionable.
CONSUMER CYCLICAL SECTOR
Chuy's Holdings, Inc. (CHUY: Consumer Cyclical/Restaurants) - BEARISH U-TURN. During Thursday's trading action, CHUY encountered solid resistance near its 50 EMA (Exponential Moving Average) and looks ready for a possible reversal. The resulting Bearish U-Turn set-up is the basis for a potential SHORT play, so get ready to enter a position in CHUY on a further decline to our trigger at 21.34. Set a 1.88 trailing stop, tightening to 0.94 on a 2.56 gain. CHUY ended the latest session at 22.10. Earnings Report Date: Aug 03, 2022. Beta: 1.82. Market-Cap: 418.525M. Optionable.
Bloomin' Brands, Inc. (BLMN: Consumer Cyclical/Restaurants) - BEARISH U-TURN. BLMN's weekly downtrend was recently interrupted by a bullish counter-trend rebound. Unfortunately for Bulls this uphill bounce reversed on Thursday after running into resistance. BLMN is now at risk of dropping even lower. On a continued pullback, short entries can be taken at 19.75. Manage your position with a 1.6 stop, pulling it up to 0.8 on a gain of 2.56. BLMN closed at 20.54 on Thursday. Earnings Report Date: Jul 28, 2022. Beta: 1.80. Market-Cap: 1.822B. Optionable.
HEALTHCARE SECTOR
REGENXBIO Inc. (RGNX: Healthcare/Biotechnology) - SQUEEZE PLAY. The ticker for Thursday's session shows RGNX 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 22.91 and a SELL short trigger at 21.1. When RGNX 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 1.81 trailing stop. Upon reaching a 3.12 profit, resize the stop to 0.91. Earnings Report Date: Aug 08, 2022. Beta: 1.14. Market-Cap: 940.319M. Optionable.
TECHNOLOGY SECTOR
DoubleVerify Holdings, Inc. (DV: Technology/Software-Application) - SQUEEZE PLAY. Thursday's trading session left DV 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 23.38 and your SELL short trigger at 21.65. One of the orders will be triggered by upcoming price action. When your market order is filled, cancel the remaining trigger and enter a 1.73 trailing stop. Once you have a 3.66 profit, reduce the stop to 0.87. Earnings Report Date: Jul 27, 2022. Beta: N/A. Market-Cap: 3.72B. 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
---------------- ------- -------- ------- ------ -------
Amazon AMZN 3/9/2022 6/6/2022 20-for-1 Yes
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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