March 14, 2023 - The RightLine Report
Notes From The Editor
Stock trading opportunities come in all shapes and sizes, yet the very best trades share at least one important characteristic - above-average price movement. In any market it is important to find stocks that are moving. While the definition of a "moving" stock is somewhat subjective, there are several things to consider when looking for good stocks on the move.
The first place to look is at stocks that are making new highs and new lows. Stocks that have just set new highs usually make ideal buy-side candidates. The ability to rise to new heights reflects investor interest, and indicates the demand for shares is in excess of available supply.
On the flip side, stocks making new lows are exhibiting extreme weakness. This usually results in even more weakness as wave after wave of investors that are tired of losing money give up and bail out. The list of New Lows often contains stocks that are begging to be shorted.
As a rule, new-highs lead to more strength, while new-lows point to more decline ahead. To get into trends early, look for stocks that have just made new four-week highs or lows. Also check the slope of the 22-day moving average. If it's leaning decidedly in one direction or the other, you can assume that the trend is relatively stable.
Keep in mind that although the purpose of trading is to be profitable, we don't have to catch 100% of every move. Find stocks that are active within your chosen time frame, and take a reasonable amount out of the anticipated movement. As for timing entries, start with the basic reversal strategies like the Bullish Bounce and Bearish U-Turn.
Trade well!
- Thomas Sutton, Editor
Note: Click on the following link for more information about the Bullish Bounce and Bearish U-Turn trading strategies: https://prorightline.com/index.php/1506/
Stocks Covered Today Stock Splits
Quick List
Stock 03/14 03/14 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
------ -------- -------- -------- -------- --------------- --------
RCEL 13.20 0.51 13.72 1.21/0.61 1.22
BWMN 29.78 1.07 30.37 2.77/1.39 2.74
WNS 90.98 1.36 92.18 5.4/2.7 3.42
AI 21.10 -0.66 23.05 20.11 2.94/1.47 5
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
US stocks rallied on Tuesday as the market sorted out February's inflation data. The Consumer Price Index (CPI) met expectations, while the core rate that excludes food and energy increased a slightly more than expected. In equities, the banking sector remained in focus, as share prices of many banks rose higher following steep losses during recent trading sessions. United Airlines (UAL $46) is preparing for an adjusted first quarter loss, and FaceBook parent company Meta Platforms (META $194) begins another round of layoffs starting Wednesday. Gold and oil prices were lower, treasury yields were higher, while the USD/dollar remained stable.
Mar 13, 2023 Mar 14, 2023
-------------------- --------------------
Dow 31,819.14 -90.50 32,155.40 336.26
Nasdaq 11,188.84 49.96 11,428.15 239.31
S&P 500 3,855.76 -5.83 3,920.56 64.80
NYSE Volume 6.57B 5.69B
NYSE Advancers 838 2,305
NYSE Decliners 2,236 763
Nasdaq Volume 6.21B 5.62B
Nasdaq Advancers 1,730 2,896
Nasdaq Decliners 2,830 1,567
New Highs/Lows
03/07 03/08 03/09 03/10 03/13 03/14
--------------------------------------------
NYSE New Highs 58 45 51 25 14 18
NYSE New Lows 49 56 96 209 345 99
Nasdaq New Highs 62 63 72 37 31 31
Nasdaq New Lows 154 193 312 547 623 214
Stocks Covered Today Stock Splits
TRADER'S TIP: "Moving Average Rainbows"
Place a variety of moving averages on your chart, and watch how they crossover each other and fan out into a "rainbow." The patterns that are drawn as the trend unfolds will indicate the strength of a reversal. Try a 13, 22, and 50 period Exponential Moving Average first to see how it works. This combination has shown to be effective under a wide range of conditions. Take notice of any similarities in the rainbows that have occurred historically, with particular attention to the way the rainbow takes shape after bouncing from support or resistance. This is a helpful tool to avoid head fakes, and determine true trend reversals in almost any time frame.
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 - 3920.56 March 14, 2023
52-Week High: 4637.30
52-Week Low: 3491.58
Daily Trend: DOWN
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 4393.13
Resistance 2: 4160.96
Resistance 1: 4011.27
Pivot: 3928.80
Support 1: 3779.10
Support 2: 3696.63
Support 3: 3464.46
NASDAQ Composite - 11428.15 March 14, 2023
52-Week High: 14646.90
52-Week Low: 10088.83
Daily Trend: DOWN
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 12821.67
Resistance 2: 12087.61
Resistance 1: 11613.25
Pivot: 11353.55
Support 1: 10879.19
Support 2: 10619.49
Support 3: 9885.43
Dow Industrials - 32155.40 March 14, 2023
52-Week High: 35492.22
52-Week Low: 28660.94
Daily Trend: DOWN
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 35999.37
Resistance 2: 34210.56
Resistance 1: 33060.10
Pivot: 32421.75
Support 1: 31271.29
Support 2: 30632.94
Support 3: 28844.13
Stocks Covered Today Stock Splits
Market Calendar
ECONOMIC REPORTS AND EVENTS (all times are Eastern): WEDNESDAY, MARCH 15 8:30 am Retail sales 8:30 am Retail sales ex 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 Empire State manufacturing 10:00 am Business inventories 10:00 am Homebuilders survey THURSDAY, MARCH 16 8:30 am Initial jobless claims 8:30 am Import price index 8:30 am Housing starts 8:30 am Building permits 8:30 am Philadelphia Fed manufacturing FRIDAY, MARCH 17 9:15 am Industrial production 9:15 am Capacity utilization 10:00 am U.S. leading economic index 10:00 am Consumer sentiment 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: "Inside Game"
An Inside Day occurs when the entire price action for the day is within the range of the previous day. This indicates that supply and demand has become balanced, and traders are indecisive over which direction to go. In theory, when the market overcomes this indecision by penetrating either the high or low of the Inside Day, it is indicating the direction of the next short-term move.
Stocks Covered in This Issue
HEALTHCARE SECTOR
AVITA Medical, Inc. (RCEL: Healthcare/Medical Devices) - BULLISH BOUNCE. Here is another example of a stock in an established uptrend that has recently experienced a counter-trend drop. The sliding price action has now found support near a moving average zone, bouncing upward during Tuesday's session to close at 13.20. Anticipate the rebound to continue, and be ready to buy RCEL at 13.72. Follow your entry with a trailing stop of 1.21 which can be tightened to 0.61 on a 1.22 profit. Earnings Report Date: N/A. Beta: 0.97. Market-Cap: 333.909M. Optionable.
INDUSTRIALS SECTOR
Bowman Consulting Group Ltd. (BWMN: Industrials/Engineering & Construction) - BULLISH BOUNCE. Looking a bit frayed after sliding downhill in recent sessions, on Tuesday BWMN seemed intent on initiating a rebound. With moving average support nearby, BWMN is at a logical place for Bulls to regroup and extend the familiar uptrend that shareholders have become accustomed to. On continued buying, plan on taking long entries with a BUY at 30.37. Manage risk with a 2.77 stop. Tighten your stop to 1.39 when you have a 2.74 profit. BWMN ended the day at 29.78. Earnings Report Date: N/A. Beta: N/A. Market-Cap: 403.716M. Not Optionable.
TECHNOLOGY SECTOR
WNS Holdings (WNS: Technology/Information Technology Services) - BULLISH BOUNCE. The charts for WNS 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 92.18, and follow your entry with a trailing stop of 5.4. Tighten it to 2.7 when a 3.42 profit is reached. WNS ended the latest session at 90.98. Earnings Report Date: Apr 19, 2023. Beta: 1.17. Market-Cap: 4.38B. Optionable.
C3.ai, Inc. (AI: Technology/Software-Application) - SQUEEZE PLAY. Tuesday's narrow price range has created a potentially profitable setup in AI, 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 23.05 and a SELL short entry at 20.11. Let AI's price action determine your long or short entry. Once the order is filled, place a 2.94 trailing stop, and tighten it to 1.47 upon getting a 5 gain. AI closed Tuesday at 21.10. Earnings Report Date: May 30, 2023. Beta: 1.40. Market-Cap: 2.368B. 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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