Notes From The Editor

"Momo" is a term used to describe a trading method focusing on stocks that are moving in one direction on high volume. This type of momentum setup pays little or no concern to the company's fundamentals. Traders who follow this strategy know that trending stocks are more likely to continue in the same direction versus stocks which are not trending.

Most of us are Momo traders in some sense. Anyone who understands price momentum and believes that "the trend is your friend" would probably agree. However, momentum plays are just one of several trading methods that we can use to make money.

For example, just as RightLine's Bullish Bounce and New High Dip setups are built on the solid trading principles of momentum and trend, the RightLine Squeeze Play is founded on the principle of volatility expansion. Volatility has a proven tendency to contract, and then expand, and then contract again.

This contraction/expansion cycle is repetitive. Once the contraction phase ends and the expansion phase begins, you can usually count on the expansion period to continue long enough to gain a profit from the related price move.

Successful traders often disagree over how to pick the best stocks, or which entry methods to use. Yet most, if not all winning traders use a methodology grounded in risk management.

No matter what you call it, a consistently profitable trading method is a good trading method. Some investors look down their noses at others as if to say "My method is the only good method." This is an area where were should be careful to keep an open mind. Prejudice against other types of investing and trading can cause us to overlook profitable tactics that sometimes turn out to be based on solid market principles.

Trade well!

- Thomas Sutton, Editor

Quick List

    
Stock     03/15     03/15      Buy      Short   Trailing Stops     Gain 
Symbol    Price      +/-      Entry     Entry   Initial/Tighten   Amount 
------  --------  --------  --------  --------  ---------------  --------

SSRM      21.23     -0.02     21.74                  1.85/0.93      1.66
BBBY      20.38      1.17      20.7     18.35        2.35/1.18      2.54
NOVA      22.73      0.50     23.28                  2.91/1.46      2.98
RUN       28.37      1.25     28.77                  4.17/2.09      4.14
DV        21.06      0.50     21.51     19.51              2/1      3.76

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.

Market Summary

The S&P 500, Dow and Nasdaq were significantly higher on Tuesday despite geopolitical tensions resulting from the ongoing conflict between between Russia and Ukraine. Economic data included a 10% inflationary surge in producer prices, as New York regional manufacturing activity dropped unexpectedly. In addition, the Fed FOMC committee just began a two-day monetary policy meeting and is expected to start an interest rate hike campaign, though the speed and magnitude with which the increases will take place is uncertain. In equities, Vail Resorts (MTN $249) released a mixed earnings report, yet shares moved higher after the ski lodge company announced a wage increase and bumped up its quarterly dividend. Gold, treasuries and oil prices were lower, the USD/dollar finished the session near even.

                        Mar 14, 2022           Mar 15, 2022   
                  --------------------   --------------------
Dow                 32,945.24     1.05     33,544.34   599.10
Nasdaq              12,581.22  -262.59     12,948.62   367.40
S&P 500              4,173.11   -31.20      4,262.45    89.34

NYSE Volume                      5.61B                  5.41B
NYSE Advancers                     876                  2,298
NYSE Decliners                   2,484                  1,036

Nasdaq Volume                    5.88B                  5.42B
Nasdaq Advancers                 1,172                  2,932
Nasdaq Decliners                 3,463                  1,733

                                 New Highs/Lows

                   03/08  03/09  03/10  03/11  03/14  03/15
                 --------------------------------------------
NYSE New Highs       108     18     44     58     32     27
NYSE New Lows        500     97    241    338    724    390
Nasdaq New Highs      52     39     26     51     36     28
Nasdaq New Lows      793    167    313    446    921    562
   

TRADER'S TIP: "Information Overload?"

So how do we manage the huge amount of market info and other financial advice being thrown our way every day? We can filter out a lot of the useless information by asking another question; how does this specifically help me to become a more successful trader and investor? Broad generalizations are helpful to an extent, but focusing on exactly what we need can provide the high-octane fuel to accelerate our progress.

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 - 4262.45 March 15, 2022

52-Week High: 4818.62
52-Week Low: 3853.50
Daily Trend: UP
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 4568.01
Resistance 2: 4398.87
Resistance 1: 4301.59
Pivot: 4229.73
Support 1: 4132.45
Support 2: 4060.59
Support 3: 3891.45

NASDAQ Composite - 12948.62 March 15, 2022

52-Week High: 16212.23
52-Week Low: 12555.35
Daily Trend: DOWN
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 14322.12
Resistance 2: 13638.92
Resistance 1: 13241.36
Pivot: 12955.72
Support 1: 12558.16
Support 2: 12272.52
Support 3: 11589.32
        
Dow Industrials - 33544.34 March 15, 2022

52-Week High: 36952.65
52-Week Low: 32071.41
Daily Trend: UP
Weekly trend: DOWN
Weekly Pivot Levels
 

Market Calendar

ECONOMIC REPORTS AND EVENTS (all times are Eastern):    


Tuesday, March 15, 2022:
15-Mar  8:30 am   Producer price index, final demand
15-Mar  8:30 am   Empire state manufacturing index

Wednesday, March 16, 2022:
16-Mar  8:30 am   Retail sales
16-Mar  8:30 am   Retail sales excluding motor vehicles
16-Mar  8:30 am   Import price index
16-Mar  8:30 am   Import price index excluding fuels
16-Mar  10 am   NAHB home builders' index
16-Mar  10 am   Business inventories (revision)
16-Mar   2 pm   FOMC announcement on fed funds rate
16-Mar  2:30 pm   Fed Chair Jerome Powell news conference

Thursday, March 17, 2022:
17-Mar  8:30 am   Initial jobless claims
17-Mar  8:30 am   Continuing jobless claims
17-Mar  8:30 am   Building permits (SAAR)
17-Mar  8:30 am   Housing starts (SAAR)
17-Mar  8:30 am   Philadelphia Fed manufacturing survey
17-Mar  9:15 am   Industrial production index
17-Mar  9:15 am   Capacity utilization rate

Friday, March 18, 2022:
18-Mar  10 am   Existing home sales (SAAR)
18-Mar  10 am   Index of leading economic indicators


For a chart of typical Up or Down market reactions to specific major US economic reports 
go to:  Economic Indicator Effects

TRADER'S TIP: "Volatility - Good or Evil?"

Though volatility can be a double-edged sword when trading, a few reminders will help you profit from rapid price movement during volatile periods. First of all, recall that volatility creates trading opportunities. If you focus on the short term, share prices that move by 10% in a day or two should be welcomed. Second, risk management is a must when volatile conditions prevail. Make absolutely certain that you use a pre-planned exit strategy to prevent unwanted losses. And finally, use the gap-open tactic to adjust, or help determine buy and sell points. You'll be glad you did!

Stocks Covered in This Issue

BASIC MATERIALS SECTOR

SSR Mining Inc. (SSRM: Basic Materials/Gold) - BULLISH BOUNCE. Another bullish bouncer, SSRM 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 SSRM reaches our entry trigger set at 21.74. Also place a 1.85 trailing stop which can be narrowed to 0.93 when you reach a 1.66 profit. SSRM closed Tuesday at 21.23. Earnings Report Date: May 04, 2022. Beta: 1.04. Market-Cap: 4.509B. Optionable.

CONSUMER CYCLICAL SECTOR

Bed Bath & Beyond Inc. (BBBY: Consumer Cyclical/Specialty Retail) - SQUEEZE PLAY. One interesting trait of price volatility is that it cycles back and forth through periods of expansion and contraction. Stocks that have recently seen their daily price range shift from an average or wide range to an extremely contracted state are ideal candidates for expansive price moves. In many cases the next move is relatively fast and covers a sizable amount of territory. To take advantage of these trades we use both a BUY and a SELL entry. This allows us to enter in whichever direction the breakout takes. In BBBY's case we will enter a BUY should it reach the 20.7 level, or a SELL short trade if it drops to 18.35. As usual a trailing stop is essential, 2.35 which should be tightened to 1.18 on a 2.54 gain. BBBY closed Tuesday at 20.38. Earnings Report Date: Apr 12, 2022. Beta: 1.56. Market-Cap: 2.043B. Optionable.

TECHNOLOGY SECTOR

Sunnova Energy International Inc. (NOVA: Technology/Solar) - BULLISH BOUNCE. Positive price behavior near moving average support on Tuesday qualifies NOVA for a Bullish Bounce setup. After several sessions of declining prices, NOVA should soon begin trading in step with its established weekly uptrend. Tell your broker to BUY shares if NOVA moves up to our entry trigger set at 23.28. You can also enter a 2.91 trailing stop, to be replaced with a 1.46 trailing stop when you obtain a 2.98 profit. NOVA closed Tuesday at 22.73. Earnings Report Date: Apr 26, 2022. Beta: 2.19. Market-Cap: 2.684B. Optionable.

Sunrun Inc. (RUN: Technology/Solar) - BULLISH BOUNCE. RUN'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 RUN back in step with the bullish weekly trend, so our BUY entry trigger is set at 28.77. Once you hold a position, trail a stop of 4.17. Tighten it to 2.09 on a 4.14 gain. RUN closed at 28.37 on Tuesday. Earnings Report Date: May 03, 2022. Beta: 2.11. Market-Cap: 6.41B. Optionable.

DoubleVerify Holdings, Inc. (DV: Technology/Software-Application) - SQUEEZE PLAY. Trader indecision has put DV squarely in the center of a Bull versus Bear standoff. This tight spot should soon give way to a clear winner in the short-term, and we want to be in position for the move. To do that we've set a BUY entry at 21.51 and a SELL short entry at 19.51. Now it's up to DV to show us which entry will be filled. Once the trade is underway place a 2 trailing stop, which can be tightened to 1 after you achieve a 3.76 profit. DV closed on Tuesday at 21.06. Earnings Report Date: May 23, 2022. Beta: N/A. Market-Cap: 3.637B. 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.

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  
---------------- -------     --------    -------     ------  -------   
ACM Research      ACMR       3/4/2022   3/24/2022   3-for-1   Yes
PAM Transport     PTSI       3/9/2022   3/30/2022   2-for-1   Yes
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.

Disclaimer

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