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March 21, 2024 - The RightLine Report
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NOTES FROM THE EDITOR
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The primary purpose of trading is to be profitable. This seems obvious, yet many traders act as if their purpose is to win every single trade while catching 100% of every move. Of course that's impossible to do. The disappointment from "losing" often causes people to lose sight of the real objective - to make money overall.
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"QUICK LIST"
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Stock 03/21 03/21 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
------ -------- -------- -------- -------- --------------- --------
ERIE 407.44 1.26 415.69 27.11/13.56 23.94
MEDS 21.65 1.60 22.29 3.28/1.64 4.08
DNLI 21.00 -0.29 21.88 20.29 1.59/0.8 2.68
CVRX 21.37 0.48 21.95 20.37 1.58/0.79 2.02
SMTC 23.05 0.67 23.77 22.07 1.7/0.85 1.8
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" at https://prorightline.com/index.php/rightline-report-quick-list/. In addition,always use the RightLine Risk Calculator before entering any position. For access to the Risk Calculator, go to https://prorightline.com/index.php/risk-calculator/. To learn more about controlling risk go to the RightLine Risk Control System at https://prorightline.com/index.php/rightline-risk-control-system/ For a glossary of terms unique to The RightLine Report go to: https://prorightline.com/index.php/glossary/ Questions? Send us an email using our contact form at: https://prorightline.com/index.php/contact-us/
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MARKET SUMMARY
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Equity markets ended higher on Thursday, extending the momentum from Wednesday's surge following the U.S. Federal Reserve's interest-rate decision and Jerome Powell's press conference. Powell's remarks on inflation moderation and solid economic growth further buoyed market sentiment. The Fed opted to keep rates steady at 5.25% to 5.5% this week but hinted at the likelihood of three rate cuts this year, as indicated by its updated "dot plot." The Fed's dot plot is a graphical representation of each Fed official's forecast for the central bank's key short-term interest rate. Updated quarterly, it aims to offer guidance on the Fed's future rate decisions, although it's important to note that Fed officials' predictions are not always accurate due to the inherent uncertainty of the future. While the major indices have posted gains this week, small-cap and mid-cap stocks outperformed both the Nasdaq and the broader S&P 500. Additionally, cyclical sectors like industrials and financials showed strength, signaling a broader market leadership. Treasury yields retreated after the Fed's dovish stance, with the 10-year Treasury yield easing to around 4.27% from above 4.3% earlier in the week. This decline in yields contributed to positive sentiment in both stock and bond markets. The Fed's message, delivered with a dovish tilt during Wednesday's meeting and press conference, pleasantly surprised markets. Although the Fed maintained current rates, its updated projections suggested the possibility of three rate cuts in 2024, despite steady economic growth of around 2.0%. Powell emphasized the Fed's expectation of inflation gradually easing down to 2% on an occasionally turbulent trajectory. Projections also indicate the fed funds rate inching towards approximately 3.1% by 2026, signaling the potential commencement of a multiyear rate-cutting cycle this year. Powell hinted at a possible slowdown in the Fed's tapering pace, reinforcing the dovish stance. We anticipate the Fed implementing rate cuts approximately three times this year, possibly following a steady quarterly schedule at its June, September, and December meetings. Mar 20, 2024 Mar 21, 2024
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Dow 39,456.75 345.99 39,811.86 299.73
Nasdaq 16,340.86 174.07 16,401.84 32.43
S&P 500 5,217.96 39.45 5,245.50 20.88
NYSE Volume 4.07B 4.23B
NYSE Advancers 2,207 1,923
NYSE Decliners 629 900
Nasdaq Volume 5.33B 5.16B
Nasdaq Advancers 3,201 2,477
Nasdaq Decliners 1,090 1,771
New Highs/Lows
03/14 03/15 03/18 03/19 03/20 03/21
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NYSE New Highs 138 106 141 175 292 440
NYSE New Lows 59 53 39 34 32 17
Nasdaq New Highs 95 84 97 93 226 342
Nasdaq New Lows 196 140 128 126 99 55
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TRADER'S TIP:
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TRADER'S TIP: "Making Decisions Builds Confidence" Each time we enter or exit a trade we make a decision. Every decision we make causes us to grow - IF we give our experiences the value they deserve. However, if we short-change ourselves for not always making "perfect" choices and view our experiences as "mistakes" our confidence will go down instead of up. Just remember that trading conditions are rarely optimum, and we're always making decisions under less than ideal circumstances. Give yourself a break, knowing that only YOU can set the proper value for each experience you have. Be sure you make the right choice. Build your confidence and never value any trade or other experience as worthless. **************************
THE TECHNICAL ANALYST
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This section contains important technical data for the three major market averages -- the S&P 500, the Nasdaq Comp Index, and the Dow Industrial Average. For guidance on how to use this information, go to: https://prorightline.com/index.php/technical-analyst-section-rightline-report/ https://www.prorightline.com/rlch/032124SPX.jpg--ECONOMIC REPORTS AND EVENTS (all times are Eastern): MONDAY, MARCH 18 10:00 am Home builder confidence index TUESDAY, MARCH 19 8:30 am Housing starts Feb 8:30 am Building permits Feb WEDNESDAY, MARCH 20 2:00 pm FOMC interest-rate decision 2:30 pm Fed Chair Powell press conference THURSDAY, MARCH 21 8:30 am Initial jobless claims 8:30 am Philadelphia Fed manufacturing survey 9:45 am S&P flash U.S. services PMI 9:45 am S&P flash U.S. manufacturing PMI 10:00 am U.S. leading economic indicators 10:00 am Existing home sales FRIDAY, MARCH 22 None scheduled For a chart of typical Up or Down market reactions to specific major US economic reports, go to "Economic Indicator Effects" at this link: https://prorightline.com/index.php/economic-indicator-effects/
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TRADER'S TIP:
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TRADER'S TIP: "Victory!" Regardless of what some "experts" have to say, trading isn't war. If you consider trading the same thing as combat, you may wind up being stressed, or even worse, hostile. Those who view trading as a matter of life and death usually take things very personally and tend to hold onto losses way too long. If you choose to use a military model for your trading approach, keep in mind that throughout history successful military leaders knew when to take a small loss on the battlefield. When outnumbered, they often retreated so they could return to fight another day. ***********************************
STOCKS COVERED IN THIS ISSUE
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FINANCIAL SERVICES SECTOR Erie Indemnity Company (ERIE: Financial Services/Insurance Brokers) - BULLISH BOUNCE. ERIE has charted an upward weekly trend until recently when sellers showed up to push prices lower. On Thursday the selling ran into solid support. A potential bounce up from this level should attract buyers and likely return ERIE to the previously established uptrend. The Bullish Bounce set-up is the basis for our BUY entry, so be ready to go long on a rise to our trigger at 415.69. Set a trailing stop of 27.11, tightening to 13.56 on a 23.94 profit. ERIE closed at 407.44 on Thursday. Earnings Report Date: Apr 25, 2024. Beta: 0.42. Market-Cap: 21.305B. Optionable. HEALTHCARE SECTOR TRxADE HEALTH, Inc. (MEDS: Healthcare/Pharmaceutical Retailers) - BULLISH BOUNCE. This trader-friendly setup turns repetitive stock behavior into real profits. Based on the tendency for up-trending stocks to drop briefly and then resume the up-trend, the Bullish Bounce places traders into excellent stocks when conditions are primed for more skyward movement. MEDS's current price action near moving average support signals a potential BUY entry at 22.29, followed by a 3.28 trailing stop which can be tightened to 1.64 upon earning 4.08. MEDS closed Thursday at 21.65. Earnings Report Date: Mar 25, 2024. Beta: 1.90. Market-Cap: 26.088M. Not Optionable. Denali Therapeutics Inc. (DNLI: Healthcare/Biotechnology) - SQUEEZE PLAY. DNLI is stuck in a Bull/Bear deadlock. Fortunately for traders this impasse should be resolved soon, with one side or the other taking control. We want to be positioned for a potential quick move up or down, so get ready to catch this train with a BUY entry at 21.88 and a SELL short entry at 20.29. Once your trade is filled, enter a 1.59 trailing stop. Tighten it to 0.8 after a 2.68 gain. DNLI closed on Thursday at 21.00. Earnings Report Date: May 06, 2024. Beta: 1.33. Market-Cap: 2.922B. Optionable. CVRx, Inc. (CVRX: Healthcare/Medical Devices) - SQUEEZE PLAY. Traders are feeling the pressure as CVRX's intra-day price range on Thursday 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 21.95 and a SELL short entry at 20.37. CVRX's price movement will decide which entry is filled. As soon as you're in the trade, enter a 1.58 trailing stop. Tighten it to 0.79 after you get a 2.02 gain. CVRX closed Thursday at 21.37. Earnings Report Date: Apr 25, 2024. Beta: 1.26. Market-Cap: 447.225M. Optionable. TECHNOLOGY SECTOR Semtech Corporation (SMTC: Technology/Semiconductors) - SQUEEZE PLAY. Thursday's narrow price range has created a potentially profitable setup in SMTC, 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 23.77 and a SELL short entry at 22.07. Let SMTC's price action determine your long or short entry. Once the order is filled, place a 1.7 trailing stop, and tighten it to 0.85 upon getting a 1.8 gain. SMTC closed Thursday at 23.05. Earnings Report Date: Mar 28, 2024. Beta: 1.81. Market-Cap: 1.482B. Optionable. IMPORTANT: Before entering any recommended positions, always use the RightLine "Risk Control System" to determine the level of acceptable risk and the maximum number of shares to buy. Link: https://prorightline.com/index.php/rightline-risk-control-system/ Use "Gap Adjusted Entries" to reset the Entry Price for stocks that gap beyond recommended entry levels. Link: https://prorightline.com/index.php/gap-adjusted-entries-increase-profits/ ***********************************
STOCK SPLIT SUMMARY
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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 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. For a closer look at the different stages of a Stock Split go to: https://prorightline.com/index.php/trading-stock-splits-stages/ ======================================================================
Best of luck and have a Great Week!
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