March 12, 2024 - The RightLine Report
Notes From The Editor
"Momo" refers to a trading approach centered on stocks exhibiting significant movement in one direction accompanied by high trading volume. Practitioners of this strategy believe that stocks following a trend are more likely to sustain that trajectory compared to those not exhibiting clear trends or undergoing recent reversals.
In essence, many of us could be considered Momo traders to some degree, especially those who adhere to the adage "the trend is your friend." Nonetheless, momentum plays represent just one among several available methods.
For instance, while RightLine's momentum-driven Bullish Bounce and New High Dip setups rely on the fundamental trading principle of trend, the Squeeze Play operates on the principle of volatility expansion. Volatility typically undergoes cycles of contraction, expansion, and subsequent contraction again.
This cyclic pattern repeats itself. Following the contraction phase, as the expansion phase unfolds, traders can generally anticipate continued expansion long enough to capitalize on resultant price movements.
Experienced traders often differ in their approaches to stock selection and entry techniques. Nevertheless, most successful traders incorporate a methodology rooted in effective risk management.
Ultimately, the efficacy of a trading strategy lies in its consistency in delivering profits. It's perplexing why some investors disparage others' methods, as if implying that their own approach is superior. Such labeling fosters bias against strategies that often rest on sound market principles.
Here's to profitable trades,
Thomas Sutton, Editor
Stocks Covered Today Stock Splits
Quick List
Stock 03/12 03/12 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
------ -------- -------- -------- -------- --------------- --------
MARA 20.19 -0.45 21.23 18.67 2.56/1.28 5.86
RILY 20.10 -0.59 21.64 19.23 2.41/1.21 3.6
QTRX 26.81 0.45 27.2 1.91/0.96 2.16
IMNM 24.34 0.69 24.88 22.98 1.9/0.95 4.96
UCTT 46.00 0.40 46.64 3.38/1.69 3.84
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
Despite a higher-than-anticipated consumer price index (CPI) inflation reading, equities closed higher on Tuesday, driven by leadership from growth sectors like information technology, communication services, and consumer discretionary within the S&P 500. The technology sector received a significant boost from robust earnings results from software giant Oracle, which reported earnings exceeding expectations after the market close yesterday. Oracle's shares surged over 10% on the back of strong growth in its cloud services segment.
Treasury yields saw an uptick, with the 2-year yield rising to 4.59%, and the 10-year yield also climbing to 4.15%. Despite the higher inflation reading, the relatively modest increase in yields suggests that markets still believe the Federal Reserve will have a credible case to initiate rate cuts around midyear.
Despite consecutive months of higher-than-expected CPI inflation, the market still assigns a probability of approximately 70% for the Fed to implement its first rate cut at the June meeting. Moreover, the Fed's preferred inflation measure, core personal consumption expenditures (PCE), is inching closer to the 2% target, rising by 2.8% year-over-year in January.
Meanwhile, European markets also trended higher, buoyed by a softer-than-anticipated U.K. employment report, potentially signaling future interest rate cuts from the Bank of England.
Looking ahead, inflation data will continue to be a focal point for markets, with Thursday's release of the producer price index (PPI) inflation for February. Expectations are for a slight uptick in both headline and core PPI inflation compared to January's figures. Additionally, Thursday will provide insights into consumer spending trends with the release of February retail sales data.
Mar 11, 2024 Mar 12, 2024
-------------------- --------------------
Dow 38,760.35 37.66 39,042.33 272.67
Nasdaq 16,019.27 -65.84 16,241.99 222.71
S&P 500 5,120.08 -3.61 5,173.60 55.66
NYSE Volume 3.91B 4.08B
NYSE Advancers 1,413 1,553
NYSE Decliners 1,397 1,260
Nasdaq Volume 4.93B 5.11B
Nasdaq Advancers 1,740 1,916
Nasdaq Decliners 2,521 2,304
New Highs/Lows
03/05 03/06 03/07 03/08 03/11 03/12
--------------------------------------------
NYSE New Highs 166 217 296 288 127 180
NYSE New Lows 37 31 20 15 19 25
Nasdaq New Highs 133 221 331 354 103 131
Nasdaq New Lows 114 116 90 83 88 125
Stocks Covered Today Stock Splits
TRADER'S TIP: "Stick With One Method"
Though exceptional brainpower isn't a requirement for trading, the ability to choose a method and stick with it is. Many traders jump quickly from one trading system to another, never spending enough time with a single approach to find out if it really works. We suggest selecting a method, consistently trade it for at least three months, measure the results and see how it performs. If it works well, stick with it. If it doesn't, then find out why, and fix or replace it. Keep in mind that most winning routines contain robust stock selection, risk management, and exit strategies - components included in the RightLine Report approach.
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".
Stocks Covered Today Stock Splits
Market Calendar
ECONOMIC REPORTS AND EVENTS (all times are Eastern): MONDAY, MAR 11 None scheduled TUESDAY, MAR 12 6:00 am NFIB optimism index 8:30 am Consumer price index 8:30 am Core CPI 8:30 am CPI year over year 8:30 am Core CPI year over year 2:00 pm Monthly U.S. federal budget WEDNESDAY, MAR 13 None scheduled THURSDAY, MAR 14 8:30 am U.S. retail sales 8:30 am Retail sales minus autos 8:30 am Producer price index 8:30 am Core PPI 8:30 am PPI year over year 8:30 am Core PPI year over year 8:30 am Initial jobless claims 10:00 am Business inventories FRIDAY, MAR 15 8:30 am Empire State manufacturing survey 8:30 am Import price index 8:30 am Import price index minus fuel 9:15 am Industrial production 9:15 am Capacity utilization 10:00 am Consumer sentiment (prelim) 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
FINANCIAL SERVICES SECTOR
Marathon Digital Holdings, Inc. (MARA: Financial Services/Capital Markets) - SQUEEZE PLAY. Traders are feeling the pressure as MARA's intra-day price range on Tuesday shrunk to the narrowest spread in over a week. The tension between buyers and sellers should provide enough pent-up engergy for a breakout move in the days ahead, so get ready to trade with the new trend. To achieve that, place a BUY entry at 21.23 and a SELL short entry at 18.67. MARA's price movement will decide which entry is filled. As soon as you're in the trade, enter a 2.56 trailing stop. Tighten it to 1.28 after you get a 5.86 gain. MARA closed Tuesday at 20.19. Earnings Report Date: May 08, 2024. Beta: 5.40. Market-Cap: 5.404B. Optionable.
B. Riley Financial, Inc. (RILY: Financial Services/Financial Conglomerates) - SQUEEZE PLAY. Tuesday's narrow price range has created a potentially profitable setup in RILY, as sellers and buyers find themselves in a near tie for control of price direction. The next short-term trend could go either way, so prepare for a move out of the draw within the next day or so. Set a BUY entry at 21.64 and a SELL short entry at 19.23. Let RILY's price action determine your long or short entry. Once the order is filled, place a 2.41 trailing stop, and tighten it to 1.21 upon getting a 3.6 gain. RILY closed Tuesday at 20.10. Earnings Report Date: Apr 01, 2024. Beta: 1.53. Market-Cap: 614.716M. Optionable.
HEALTHCARE SECTOR
Quanterix Corporation (QTRX: Healthcare/Medical Devices) - BULLISH BOUNCE. QTRX'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 QTRX back in step with the bullish weekly trend, so our BUY entry trigger is set at 27.2. Once you hold a position, trail a stop of 1.91. Tighten it to 0.96 on a 2.16 gain. QTRX closed at 26.81 on Tuesday. Earnings Report Date: May 07, 2024. Beta: 1.31. Market-Cap: 1.02B. Optionable.
Immunome, Inc. (IMNM: Healthcare/Biotechnology) - SQUEEZE PLAY. A look at IMNM's daily chart shows what a price squeeze is all about. The constricted high-low daily trading range has produced a setup similar to a tightly coiled spring. Expect price to move sharply soon, with the direction yet to be determined. Let the upcoming market action resolve whether you will buy shares or sell short. To capture a move either way, place a BUY trigger at 24.88 and a SELL short trigger at 22.98. Once IMNM shows which way it's headed, place your triggered entry order. As soon as your order is filled, follow with a trailing stop of 1.9 and tighten to 0.95 on a 4.96 gain. IMNM closed Tuesday at 24.34. Earnings Report Date: Mar 14, 2024. Beta: 1.68. Market-Cap: 1.391B. Optionable.
TECHNOLOGY SECTOR
Ultra Clean Holdings, Inc. (UCTT: Technology/Semiconductor Equipment & Materials) - BULLISH BOUNCE. The charts for UCTT 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 46.64, and follow your entry with a trailing stop of 3.38. Tighten it to 1.69 when a 3.84 profit is reached. UCTT ended the latest session at 46.00. Earnings Report Date: Apr 24, 2024. Beta: 2.03. Market-Cap: 2.054B. 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.
Disclaimer
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