March 21, 2023 - The RightLine Report
Notes From The Editor
What is the best trading strategy? While there are basic guidelines for profitable trading - effective risk management, for example - there is no one-size-fits-all blueprint for success in the market. This is because each individual trader is unique.
How often should you trade? What should you trade? How long should you hold positions? These are fundamental questions that only you can answer.
A lot depends on your own tolerance for risk and volatility. If you're the more conservative type, it would make sense to take longer-term positions in stocks that tend to be less volatile. Similarly, those who are willing to ramp up the risk/reward ratio may want to take shorter- term trades in stocks that see larger intraday swings.
Your approach to trading also depends on your lifestyle. Are you an early riser who's ready to tackle the market at the opening bell? Or would you prefer to make your trading decisions after the market closes, lining up entry and exit points after-hours? Does your schedule allow you to stick with the market throughout the trading session, moving in and out of positions during the day? Or are you otherwise occupied, and unable to watch stocks on an intra-session basis?
If you have a desire to trade, but find yourself struggling to integrate trading into your life, ask yourself these questions. By custom-tailoring a strategy that fits with you, you'll find yourself in a much better position to squeeze profits out of stocks.
No matter what unique approach you choose, solid risk management and stock selection can greatly boost your chances of success. But those odds will move even more in your favor if you align your trading strategy with your schedule and your life. Remember: the market will always be there. Make it work for you on your terms.
Here's to profits,
Kent Barton
Senior Analyst
Stocks Covered Today Stock Splits
Quick List
Stock 03/21 03/21 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
------ -------- -------- -------- -------- --------------- --------
GEHC 76.52 1.31 77.68 4.47/2.24 3.38
TXG 50.10 2.30 50.97 4.43/2.22 5.48
INBX 21.74 0.17 20.94 1.68/0.84 2.58
OM 21.94 0.32 21.13 1.67/0.84 2.64
CVEO 20.32 0.92 20.65 19.12 1.53/0.77 3.78
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
The top US stock indexes moved higher on Tuesday, as traders are positioning for the conclusion of the Federal Bank's interest-rate meeting on Wednesday, when a quarter-percentage-point increase appears to be likely. In equities, regional banks and other financial firms were responsible for much of the bullish price action, following news reports that the CEO of JP Morgan Chase (JPM) is leading discussions to stabilize embattled lender First Republic Bank (FRC), increasing FRC's share price near 45%. On the economic front, sales of existing homes were up 14.5% in February, yet sales were down 23% from a year ago. Oil prices, the USD/dollar, gold and treasury yields were all higher.
Mar 20, 2023 Mar 21, 2023
-------------------- --------------------
Dow 32,244.58 382.60 32,560.60 316.02
Nasdaq 11,675.54 45.02 11,860.11 184.57
S&P 500 3,951.57 34.93 4,002.87 51.30
NYSE Volume 5.39B 4.95B
NYSE Advancers 1,858 2,392
NYSE Decliners 1,190 679
Nasdaq Volume 5.01B 4.85B
Nasdaq Advancers 2,303 3,314
Nasdaq Decliners 2,206 1,205
New Highs/Lows
03/14 03/15 03/16 03/17 03/20 03/21
--------------------------------------------
NYSE New Highs 18 12 16 13 21 25
NYSE New Lows 99 266 177 199 134 44
Nasdaq New Highs 31 28 54 35 39 60
Nasdaq New Lows 214 432 284 340 314 127
Stocks Covered Today Stock Splits
TRADER'S TIP: "Raindrops Keep Fallin' On My Head"
According to the Hulbert Digest, professors from Ohio State and the University of Michigan found that weather had a strong impact on the stock markets of 26 countries around the globe between 1982 and 1997. Specifically, those stock markets went up more than average when it was sunny in the cities where the markets were located, and declined more than average when it was cloudy.
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 - 4002.87 March 21, 2023
52-Week High: 4637.30
52-Week Low: 3491.58
Daily Trend: UP
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 4207.85
Resistance 2: 4052.25
Resistance 1: 3984.44
Pivot: 3896.65
Support 1: 3828.84
Support 2: 3741.05
Support 3: 3585.45
NASDAQ Composite - 11860.11 March 21, 2023
52-Week High: 14646.90
52-Week Low: 10088.83
Daily Trend: UP
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 13042.76
Resistance 2: 12252.45
Resistance 1: 11941.48
Pivot: 11462.14
Support 1: 11151.16
Support 2: 10671.82
Support 3: 9881.51
Dow Industrials - 32560.60 March 21, 2023
52-Week High: 35492.22
52-Week Low: 28660.94
Daily Trend: UP
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 33619.67
Resistance 2: 32742.90
Resistance 1: 32302.44
Pivot: 31866.13
Support 1: 31425.67
Support 2: 30989.36
Support 3: 30112.59
Stocks Covered Today Stock Splits
Market Calendar
ECONOMIC REPORTS AND EVENTS (all times are Eastern): MONDAY, MARCH 21 None scheduled TUESDAY, MARCH 22 10:00 am Existing home sales WEDNESDAY, MARCH 22 2:00 pm Fed interest-rate decision 2:30 pm Fed Chair Powell press conference THURSDAY, MARCH 23 8:30 am U.S. current account 8:30 am Initial jobless claims 8:30 am Continuing jobless claims 10:00 am New home sales FRIDAY, MARCH 24 8:30 am Durable goods Feb. 9:45 am S&P Global flash U.S. services PMI March 9.45 am S&P Global flash U.S. manufacturing PMI 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: "90% Winners = Big Losses"
Most people want to be right on every trade or investment. Because of this "need to be right," traders tend to choose trading systems with the highest level of wins vs. losses. Unfortunately, the losses in these systems are often quite large and produce negative results overall.
Stocks Covered in This Issue
HEALTHCARE SECTOR
GE HealthCare Technologies Inc. (GEHC: Healthcare/Health Information Services) - BULLISH BOUNCE. Everyone familiar with price charts knows that a stock tends to bounce its way higher rather than move in a straight line. The lower levels of these short-term rebounds offer a safe and often early entry into stocks that are in the process of establishing longer-term uptrends. GEHC's reaction to support on Tuesday created a Bullish Bounce setup with a BUY entry trigger at 77.68. Use a 4.47 trailing stop, which should work well with GEHC's typical daily range. Tighten it to 2.24 on a 3.38 profit. GEHC closed at 76.52 on Tuesday. Earnings Report Date: N/A. Beta: N/A. Market-Cap: 35.092B. Optionable.
10x Genomics, Inc. (TXG: Healthcare/Health Information Services) - BULLISH BOUNCE. Some people hear of a stock that's performing nicely and then buy it without any regard for timing the entry. This approach usually leaves money on the table, money that could just as well be added to profits. The Bullish Bounce setup provides a well timed entry and reduces exposure to risk by placing both the entry trigger and exit stop near the bottom of the bounce. We have an opportunity to use this approach with TXG which met our setup criteria on Tuesday. The BUY trigger for this trade is at 50.97, and the trailing stop is sized at 4.43. Resize the stop to 2.22 upon collecting a 5.48 point gain. TXG closed Tuesday at 50.10. Earnings Report Date: May 02, 2023. Beta: 1.73. Market-Cap: 5.779B. Optionable.
Inhibrx, Inc. (INBX: Healthcare/Biotechnology) - BEARISH U-TURN. Shares of INBX have experienced the pain of selling pressure for a while, yet a recent bounce has given shareholders some welcome yet perhaps temporary relief. On Tuesday the upward bounce ran into a brick wall at a Moving Average. INBX 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 20.94, using a 1.68 stop. Tighten to 0.84 on a gain of 2.58. Tuesday's closing tick was 21.74. Earnings Report Date: May 08, 2023. Beta: 2.97. Market-Cap: 947.257M. Optionable.
Outset Medical, Inc. (OM: Healthcare/Medical Devices) - BEARISH U-TURN. OM's weekly downtrend was recently interrupted by a bullish counter-trend rebound. Unfortunately for Bulls this uphill bounce reversed on Tuesday after running into resistance. OM is now at risk of dropping even lower. On a continued pullback, short entries can be taken at 21.13. Manage your position with a 1.67 stop, pulling it up to 0.84 on a gain of 2.64. OM closed at 21.94 on Tuesday. Earnings Report Date: May 02, 2023. Beta: 1.55. Market-Cap: 1.067B. Optionable.
INDUSTRIALS SECTOR
Civeo Corporation (CVEO: Industrials/Specialty Business Services) - SQUEEZE PLAY. The struggle between buyers and sellers has resulted in CVEO's narrowest trading range of the past seven sessions. With neither group able to take complete control on Tuesday, the stock's short term destiny is up for grabs. You can capitalize on this unusually tight condition by placing both a BUY order at 20.65 and a SELL order at 19.12. Regardless of which order is triggered, cancel the other one and follow your entry with a 1.53 trailing stop. Tighten the stop to 0.77 once you have a 3.78 gain. CVEO closed Tuesday at 20.32. Earnings Report Date: Apr 27, 2023. Beta: 2.64. Market-Cap: 309.22M. 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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