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March 23, 2023 - The RightLine Report
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NOTES FROM THE EDITOR
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"Think education is expensive? Try ignorance."RightLine took this bit of wisdom to heart in 1997 and turned it into a company trademark. Since then we have emphasized a personal trading education as a gateway to financial improvement. Being students of the market, we're always learning. Every day presents new challenges, and within them we find new opportunities.
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"QUICK LIST"
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Stock 03/23 03/23 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
------ -------- -------- -------- -------- --------------- --------
PTLO 21.03 0.32 21.64 20.18 1.46/0.73 2.34
PBT 23.42 0.44 23.81 22.42 1.39/0.7 1.7
PTGX 21.01 -0.03 21.69 19.77 1.92/0.96 2.72
RVMD 21.11 0.21 21.64 20 1.64/0.82 2.96
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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The top US stock indices were mixed but near even on Thursday as traders contemplated a possible end to the Federal Bank's rate-hiking cycle with a backdrop of concerns regarding the actual state of the banking sector and broader economy. On the economic front, new home sales lower due to mortgage rate worries, while the number of initial jobless claims suggests that the job market is still strong despite pressure from the Fed's tightening campaign. In equities, the energy sector felt the heat as crude oil futures dropped below $70 a barrel, financials and consumer staples also slid down the hill. On the plus side, technology and communications stocks finished the session higher. Gold set a new 52-week high, treasury yields were down, and the USD/dollar closed near even. Mar 22, 2023 Mar 23, 2023
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Dow 32,030.11 -530.49 32,105.25 75.14
Nasdaq 11,669.96 -190.15 11,787.40 117.44
S&P 500 3,936.97 -65.90 3,948.72 11.75
NYSE Volume 4.55B 5.01B
NYSE Advancers 767 1,080
NYSE Decliners 2,249 1,932
Nasdaq Volume 5B 4.94B
Nasdaq Advancers 1,265 2,091
Nasdaq Decliners 3,243 2,349
New Highs/Lows
03/16 03/17 03/20 03/21 03/22 03/23
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NYSE New Highs 16 13 21 25 28 31
NYSE New Lows 177 199 134 44 102 212
Nasdaq New Highs 54 35 39 60 49 57
Nasdaq New Lows 284 340 314 127 190 314
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TRADER'S TIP:
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TRADER'S TIP: "Selling & Shorting" "It is one thing to take profits on a long position but quite another to go short. Shorting requires a much higher level of proof that the trend has turned. When your indicators tell you that a stock is too high, there is nothing wrong with taking profits. You need to set much more exacting parameters for shorting, making sure that a stock has in fact turned down, permitting you to short. Use the same approach at the bottoms - decide in advance what price action will confirm an upside trend reversal, permitting you to buy." ~ Alex Elder, Trader and Author **************************
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/ S&P 500 - 3948.72 March 23, 2023 52-Week High: 4637.30 52-Week Low: 3491.58 Daily Trend: UP Weekly trend: DOWN Weekly Pivot Levels Resistance 3: 2897.32 Resistance 2: 2774.72 Resistance 1: 1387.36 Pivot: 2652.12 Support 1: 1264.76 Support 2: 2529.52 Support 3: 2406.92 https://www.prorightline.com/rlch/032323SPX.jpg--ECONOMIC REPORTS AND EVENTS (all times are Eastern): 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" 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: "Trading Ranges" When a stock is in a "trading range" you can draw relatively horizontal parallel lines that enclose most of the highs and lows. As time passes, these lines can provide potential resistance - on top - and support - on bottom - for the stock. When it breaks through these lines and disrupts the trading range, a new pattern can begin as long as the stock does not quickly return to its previous range. When the stock breaks out, the previous top - resistance - can become the bottom - support - of a new trading range. ***********************************
STOCKS COVERED IN THIS ISSUE
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CONSUMER CYCLICAL SECTOR Portillo's Inc. (PTLO: Consumer Cyclical/Restaurants) - SQUEEZE PLAY. PTLO traders on both sides of the fence are now locked in a head-to-head shootout. Thursday's price range was the narrowest in over a week, as neither Bears or Bulls have been able to clearly gain the upper hand. This gives us an opportunity to catch the next directional move with little risk of loss. To do this we'll place both a long and a short trigger with a BUY at 21.64 and a SELL short trigger at 20.18. When one of the orders is filled, cancel the remaining order and enter a 1.46 trailing stop. When you've reached a 2.34 paper profit, tighten the stop to 0.73. PTLO closed at 21.03 on Thursday. Earnings Report Date: N/A. Beta: N/A. Market-Cap: 1.145B. Optionable. ENERGY SECTOR Permian Basin Royalty Trust (PBT: Energy/Oil & Gas Midstream) - SQUEEZE PLAY. PBT shareholders know what it feels like to be squeezed. Thursday's slim price range reveals uncertainty on both sides of the table, a situation which often resolves itself by either Bears or Bulls quickly gaining a clear advantage. The question is "who will win?" Near-term market action tell us whether we should sell short or we should buy shares instead. PBT closed Thursday at 23.42. The plan is to enter in the right direction by placing a BUY trigger at 23.81 and a SELL short trigger at 22.42. Once PBT establishes direction, place your triggered order. As soon as you are in the trade, place a trailing stop in the amount of 1.39. After you've collected a 1.7 profit, tighten the stop to 0.7. Earnings Report Date: N/A. Beta: 0.89. Market-Cap: 1.092B. Optionable. HEALTHCARE SECTOR Protagonist Therapeutics, Inc. (PTGX: Healthcare/Biotechnology) - SQUEEZE PLAY. In certain stocks a tightly constricted price range is a sign that neither bulls nor bears are confident of winning in the near term. This often means that the side that gives up first causes a quick move in the opposite direction. In these fear dominated skirmishes, opposing traders always benefit from the retreat. In the Squeeze Play setup you can actually play both sides of the inevitable surge. PTGX traders reached this state of stand-off on Thursday with the tightest range of the past seven days. You can take advantage of their efforts by placing a low risk BUY trigger at 21.69 and a SELL short trigger at 19.77. After one of the two orders is filled, cancel the un-triggered order and place a trailing stop at 1.92 which can be tightened to 0.96 on a 2.72 gain. PTGX closed Thursday at 21.01. Earnings Report Date: May 02, 2023. Beta: 2.00. Market-Cap: 1.077B. Optionable. Revolution Medicines, Inc. (RVMD: Healthcare/Biotechnology) - SQUEEZE PLAY. Sometimes when Bulls and Bears face off in the market arena for a typical day-long battle, there is no clear winner. This is evident when the daily price range contracts to an unusually narrow state. RVMD found itself in this condition on Thursday when neither buyers or sellers were able to push ahead. This setup provides traders a chance to hop on board the next breakout - whether it's to the upside or down - with little risk of loss. To do this place a BUY order at 21.64 and a SELL short trigger at 20. When RVMD moves outside of Thursday's range, one of the orders will be filled. Once you hold a position of shares, cancel the unfilled order and place a 1.64 trailing stop. After you've got a 2.96 profit, tighten the stop to 0.82. RVMD closed at 21.11 on Thursday. Earnings Report Date: May 08, 2023. Beta: 1.49. Market-Cap: 2.241B. 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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