Notes From The Editor

It's a funny thing, this stock market. On one hand, there are some elements that never change. Human emotions are the fundamental driver behind equity movement, and these won't be changing anytime soon. This helps give rise to reliable technical set-ups that continue to bear fruit year after year.

On the other hand, the market environment, just like the marketplace itself, is constantly changing. As traders it's our job to adapt to these changes and build ourselves a more solid foundation to score profits. When an underlying dynamic shifts, it spells opportunity.

Failing to respond to change can leave you out in the cold. This is why being an effective trader is an ongoing learning process.

While picking a turning point in the market is no easy feat, the lion's share of profits are made between two extremes. That's good news for those of us who can't look into the future and consistently predict the top and bottom of every major trend.

Waiting for confirmation is crucial. Take, for example, the 2007 bubble in the homebuilding sector. Its collapse didn't come as a major surprise. In fact, many contrarian traders saw it coming long before it actually happened - so long, in fact that they began shorting the group too early. They had the right idea, but jumped on the Bear train before getting enough downside confirmation.

Timing is everything. But how do you know when a trend has actually shifted? The most obvious indicator would be technical breakdowns/breakouts in both the sector index and major stocks within the industry. However, this is no guarantee; head-fakes do happen, and violations of major support/resistance and trendlines can be a result of broader market activity rather than something sector-specific.

Changes in relative strength can often be more telling. In order to take out some of the noise, monitor longer-term (weekly) trends of relative weakness in addition to the daily. If a group that's been steadily outperforming the broader market begins to lose its leadership position, it becomes a candidate for a trend shift. If it starts underperforming the major indices, you've got yourself a sector that's likely to be heading lower.

The inverse is true of bearish groups that begin to stabilize; once they bottom out, related stocks often race higher as money begins to rotate back in.

Here's to profits,

Kent Barton
Senior Analyst

Quick List

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

AMCX      22.65     -0.24     23.09     21.53        1.56/0.78      1.66
CSV       33.88     -0.08     34.58     32.45        2.13/1.07      1.88
DMLP      31.31      0.36     31.73                  2.44/1.22      1.84
MHUA      31.12      1.39     33.25     28.14        5.11/2.56      6.24
TITN      46.49      0.52     47.32                  4.49/2.25      3.22

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

US stocks rallied higher on Thursday despite economic news showing a dip in unemployment claims and a lowered revision in fourth quarter GPD/Gross Domestic Product. In equities, shares of Macy's (M $23) and Salesforce (CRM $187) surged higher after the firms announced better quarterly profits than expected. Treasury yields contine to march higher, as did the USD/dollar and oil prices. Gold finished the session lower.

                        Mar 1, 2023            Mar 2, 2023    
                  --------------------   --------------------
Dow                 32,661.84     5.14     33,003.57   341.73
Nasdaq              11,379.48   -76.06     11,462.98    83.50
S&P 500              3,951.39   -18.76      3,981.35    29.96

NYSE Volume                      4.26B                  4.25B
NYSE Advancers                   1,333                  1,654
NYSE Decliners                   1,702                  1,416

Nasdaq Volume                    4.95B                  5.33B
Nasdaq Advancers                 1,971                  2,409
Nasdaq Decliners                 2,545                  2,121

                                 New Highs/Lows

                   02/23  02/24  02/27  02/28  03/01  03/02
                 --------------------------------------------
NYSE New Highs        57     44     72     80     86     83
NYSE New Lows         28     47     25     36     51     51
Nasdaq New Highs      83     60    100    104    100     95
Nasdaq New Lows      130    169    102    102    132    163
   

TRADER'S TIP: "Successful Traders Pay Their Share of Taxes"

54% of all personal income taxes paid to the IRS come from a relatively small group of people - only 5% of all Americans. Research shows that these high income earners use considerably less government services per person than the other 95% who together pay only 46% of the total US tax bill.

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 - 3981.35 March 2, 2023

52-Week High: 4637.30
52-Week Low: 3491.58
Daily Trend: DOWN
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 2828.51
Resistance 2: 2738.62
Resistance 1: 1369.31
Pivot: 2648.73
Support 1: 1279.42
Support 2: 2558.84
Support 3: 2468.95

NASDAQ Composite - 11462.98 March 2, 2023

52-Week High: 14646.90
52-Week Low: 10088.83
Daily Trend: DOWN
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 8196.18
Resistance 2: 7904.56
Resistance 1: 3952.28
Pivot: 7612.94
Support 1: 3660.66
Support 2: 7321.32
Support 3: 7029.70
        
Dow Industrials - 33003.57 March 2, 2023

52-Week High: 35492.22
52-Week Low: 28660.94
Daily Trend: DOWN
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 23273.80
Resistance 2: 22585.23
Resistance 1: 11292.61
Pivot: 21896.66
Support 1: 10604.04
Support 2: 21208.09
Support 3: 20519.52
 

Market Calendar

ECONOMIC REPORTS AND EVENTS (all times are Eastern):    

Monday, March 06, 2023:
NONE

Tuesday, March 07, 2023:
NONE

Wednesday, March 08, 2023:
NONE

Thursday, March 09, 2023:
NONE

Friday, March 10, 2023:
NONE


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

TRADER'S TIP: "In The Game"

We can take advantage of price movement with careful planning and proper trading execution, but there's no reason to ever force a trade. Taking reasonable risk always includes solid money management so be sure to include Risk Control in your trading plan. Also, we always have the option to stand aside when nothing seems to work - just remember that while the sidelines offer a safe place to watch as we wait for an opening, we have to be on the field to score!

Stocks Covered in This Issue

COMMUNICATION SERVICES SECTOR

AMC Networks Inc. (AMCX: Communication Services/Entertainment) - SQUEEZE PLAY. Traders are feeling the pressure as AMCX's intra-day price range on Friday 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 23.09 and a SELL short entry at 21.53. AMCX's price movement will decide which entry is filled. As soon as you're in the trade, enter a 1.56 trailing stop. Tighten it to 0.78 after you get a 1.66 gain. AMCX closed Friday at 22.65. Earnings Report Date: May 03, 2023. Beta: 1.24. Market-Cap: 974.152M. Optionable.

CONSUMER CYCLICAL SECTOR

Carriage Services, Inc. (CSV: Consumer Cyclical/Personal Services) - SQUEEZE PLAY. Friday's narrow price range has created a potentially profitable setup in CSV, 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 34.58 and a SELL short entry at 32.45. Let CSV's price action determine your long or short entry. Once the order is filled, place a 2.13 trailing stop, and tighten it to 1.07 upon getting a 1.88 gain. CSV closed Friday at 33.88. Earnings Report Date: Apr 25, 2023. Beta: 0.83. Market-Cap: 504.494M. Optionable.

ENERGY SECTOR

Dorchester Minerals, L.P. (DMLP: Energy/Oil & Gas E&P) - BULLISH BOUNCE. Positive price behavior near moving average support on Friday qualifies DMLP for a Bullish Bounce setup. After several sessions of declining prices, DMLP should soon begin trading in step with its established weekly uptrend. Tell your broker to BUY shares if DMLP moves up to our entry trigger set at 31.73. You can also enter a 2.44 trailing stop, to be replaced with a 1.22 trailing stop when you obtain a 1.84 profit. DMLP closed Friday at 31.31. Earnings Report Date: May 03, 2023. Beta: 1.18. Market-Cap: 1.201B. Optionable.

HEALTHCARE SECTOR

Meihua International Medical Technologies Co., Ltd. (MHUA: Healthcare/Medical Instruments & Supplies) - SQUEEZE PLAY. A look at MHUA'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 33.25 and a SELL short trigger at 28.14. Once MHUA shows which way it's headed, place your triggered entry order. As soon as your order is filled, follow with a trailing stop of 5.11 and tighten to 2.56 on a 6.24 gain. MHUA closed Friday at 31.12. Earnings Report Date: N/A. Beta: N/A. Market-Cap: 745.013M. Not Optionable.

INDUSTRIALS SECTOR

Titan Machinery Inc. (TITN: Industrials/Industrial Distribution) - BULLISH BOUNCE. TITN's positive weekly uptrend is still intact despite recent selling that has driven share prices lower. Price action on Friday 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 TITN back in step with the bullish weekly trend, so our BUY entry trigger is set at 47.32. Once you hold a position, trail a stop of 4.49. Tighten it to 2.25 on a 3.22 gain. TITN closed at 46.49 on Friday. Earnings Report Date: Mar 22, 2023. Beta: 1.68. Market-Cap: 1.056B. 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  
---------------- -------     --------    -------     ------  -------   

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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