March 25, 2023 - The RightLine Report


Notes From The Editor

Back in my greenhorn trading days, I made a number of dumb mistakes - repeatedly. One of the most frustrating was when I would find a great set-up, lose confidence and fail to pull the trigger, and then watch the set-up play out exactly as I had expected.

This scenario is inevitable for any trader; there will always be the "ones that got away." What's important is that it doesn't happen constantly. One of the best remedies for trigger-shy traders is a pre-entry checklist that you run through every time - much like a pilot goes through a safety checklist before takeoff. The checklist helps you defeat two kinds of fear: loss of money and loss of opportunity.

Proper risk management is the best way to ensure that your account won't take too big of a hit if the trade turns against you. If you've determined ahead of time how big your positions will be, as well as your stop-loss, you've already got a worst-case scenario for the trade.

Those who trade small-cap equities should also verify that the Average Daily Volume (ADV) is a bare minimum of 40,000 shares. Anything under that could spell trouble in terms of liquidity and unexpected price swings.

The fear of missing out on a better opportunity can be especially high if most of your trading capital is already tied up in other positions. It's very easy to justify not pulling the trigger when you tell yourself "there are better places to put my money."

With so many possible set-ups out there, you should only take the ones that fit with your personal goals and trading style. The way to make sure this happens is to verify that the equity has sufficient volatility for your timeframe. You can check both a stock's Beta (its volatility versus the S&P 500) and its recent trading range to get a good sense for what it might do once you jump onboard.

That said, here's an example of a quick checklist that a trader might run through before entering a trade. If all these conditions are met, it's simply a matter of sending the order and waiting to see how things play out. No more balking!

- Beta is more than 1.50

- Average Daily Volume is greater than 80,000 shares

- Average Trading Range over the past week has been more than 3% per day

- The risk/reward ratio is at least 1:2.5

- The proper number of shares have been calculated

- Stop-loss placement has been determined

Here's to profits,

Kent Barton
Senior Analyst

Editorial    Quick List    Market Summary    Technical Analyst    Market Calendar   
Stocks Covered Today    Stock Splits      Trader's Corner

Quick List

Stock     03/25     03/25      Buy      Short   Trailing Stops     Gain 
Symbol    Price      +/-      Entry     Entry   Initial/Tighten   Amount 
------  --------  --------  --------  --------  ---------------  --------

MSCI     543.10     -3.86    552.15                32.16/16.08     22.84
LNC       20.70      0.31     21.08     19.14        1.94/0.97      2.44
TYRA      15.95      0.50     16.21                  1.81/0.91       3.2
SLG       20.50      0.54     20.91     18.48        2.43/1.22      2.64
INTT      20.30     -0.44     21.37     19.52        1.85/0.93      1.66

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.

Editorial    Quick List    Market Summary    Technical Analyst    Market Calendar   
Stocks Covered Today    Stock Splits      Trader's Corner

Market Summary

US stocks were slightly higher on Friday, as traders continue to digest the potential impact of the Fed Bank's quarter-point interest rate increase on Wednesday, along with ongoing challenges in the banking sector and high inflation. In equities, the share price of Deutsche Bank (DB) fell hard as the German lender became the most recent bank to feel the pain of investor concerns about the health of the global financial system following the forced takeover of Credit Suisse (CS) and the closures of several US banks in recent weeks. Real estate stocks were the top gainers for the session, followed by health care and consumer staples. Financials and consumer discretionary stocks slid lower, while technology stocks were little changed, though the tech-focused Nasdaq Composite managed to chalk up its second bullish week in a row. Gold and oil prices both declined, trteasury yields closed near even, and the USD/dollar moved higher.

                      Friday                 On The Week      
                  --------------------   --------------------
Dow                 32,237.53   132.28      +375.55     1.18%
Nasdaq              11,823.96    36.56      +193.45     1.66%
S&P 500              3,970.99    22.27       +54.35     1.39%

NYSE Volume                       4.6B                       
NYSE Advancers                   1,862                       
NYSE Decliners                   1,135                       

Nasdaq Volume                    4.38B                       
Nasdaq Advancers                 2,492                       
Nasdaq Decliners                 1,922                       

                                 New Highs/Lows

                   03/17  03/20  03/21  03/22  03/23  03/24
NYSE New Highs        13     21     25     28     31     23
NYSE New Lows        199    134     44    102    212    260
Nasdaq New Highs      35     39     60     49     57     42
Nasdaq New Lows      340    314    127    190    314    333

Editorial    Quick List    Market Summary    Technical Analyst    Market Calendar   
Stocks Covered Today    Stock Splits      Trader's Corner

TRADER'S TIP: "Squeeze Plays"

Price squeezed into a much smaller-than-average range causes a dramatic drop in volatility. Due to the cyclical and explosive nature of volatility, powerful price moves tend to occur soon after these narrow range setups. But there's no reason to jump in too fast. Be patient, let the market show its hand first, and you'll get a low risk entry with the potential for high reward!

The Technical Analyst

SPX Daily Chart

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 - 3970.99 March 24, 2023

52-Week High: 4637.30
52-Week Low: 3491.58
Daily Trend: UP
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 4233.87
Resistance 2: 4103.54
Resistance 1: 4037.26
Pivot: 3973.21
Support 1: 3906.93
Support 2: 3842.88
Support 3: 3712.55

NASDAQ Composite - 11823.96 March 24, 2023

52-Week High: 14646.90
52-Week Low: 10088.83
Daily Trend: UP
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 12722.81
Resistance 2: 12259.51
Resistance 1: 12041.73
Pivot: 11796.21
Support 1: 11578.43
Support 2: 11332.91
Support 3: 10869.61
Dow Industrials - 32237.53 March 24, 2023

52-Week High: 35492.22
52-Week Low: 28660.94
Daily Trend: UP
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 34181.62
Resistance 2: 33224.91
Resistance 1: 32731.22
Pivot: 32268.20
Support 1: 31774.51
Support 2: 31311.49
Support 3: 30354.78

Editorial    Quick List    Market Summary    Technical Analyst    Market Calendar   
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Market Calendar

ECONOMIC REPORTS AND EVENTS (all times are Eastern):    

5:00 pm	Fed Gov. Jefferson speaks
8:30 am	Advanced U.S. trade balance in goods
8:30 am	Advanced retail inventories	Feb.	
8:30 am	Advanced wholesale inventories	
9:00 am	S&P Case-Shiller home price index (20 cities)
9:00 am	FHFA home price index	
10:00 am	U.S. consumer confidence	
10:00 am	Fed Gov. Barr testifies to Senate on banks
10:00 am	Pending U.S. home sales	
10:00 am	Fed Gov. Barr testifies to House on banks
8:30 am	GDP (2nd revision)		
8:30 am	Initial jobless claims	
8:30 am	Continuing jobless claims				
12:45 pm	Boston Fed President Collins speaks
8:30 am	Personal income (nominal)	
8:30 am	Personal spending (nominal)	
8:30 am	PCE index]	
8:30 am	Core PCE index	
8:30 am	PCE (year-over-year)	
8:30 am	Core PCE (year-over-year)	
9:45 am	Chicago Business Barometer	
10:00 am	Consumer sentiment (final)	
10:00 pm	Fed Gov. Waller speaks				
3:05 pm	New York Fed President Williams speaks				
5:45 pm	Fed Gov. Cook speaks
For a chart of typical Up or Down market reactions to specific major US economic reports 
go to:  Economic Indicator Effects

Editorial    Quick List    Market Summary    Technical Analyst    Market Calendar   
Stocks Covered Today    Stock Splits      Trader's Corner

TRADER'S TIP: "Earnings Conference Calls"

Since the SEC implemented the Fair Disclosure laws, most companies allow individual shareholders to listen in on earnings conference calls that were previously limited to analysts only. If you are tracking a stock as it approaches its scheduled earnings announcement, you may want to look for the related conference call and mark it on your calendar. The behavior of the stock during the call can telegraph early reaction to management's explanation of earnings related events. If you can't find any mention of the call, give the firm's Investor Relations department a ring to ask when or if a call will be held.

Stocks Covered in This Issue


MSCI Inc. (MSCI: Financial Services/Financial Data & Stock Exchanges) - BULLISH BOUNCE. Another bullish bouncer, MSCI appears ready to resume trading in an uptrend after recent selling forced the stock lower for several days. Friday's positive price action near Moving Average support says it's time to BUY shares if MSCI reaches our entry trigger set at 552.15. Also place a 32.16 trailing stop which can be narrowed to 16.08 when you reach a 22.84 profit. MSCI closed Friday at 543.10. Earnings Report Date: Apr 24, 2023. Beta: 1.13. Market-Cap: 43.791B. Optionable.

Lincoln National Corporation (LNC: Financial Services/Insurance-Life) - SQUEEZE PLAY. LNC 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 21.08 and a SELL short entry at 19.14. Once your trade is filled, enter a 1.94 trailing stop. Tighten it to 0.97 after a 2.44 gain. LNC closed on Friday at 20.70. Earnings Report Date: May 02, 2023. Beta: 1.79. Market-Cap: 3.565B. Optionable.


Tyra Biosciences, Inc. (TYRA: Healthcare/Biotechnology) - BULLISH BOUNCE. Entering a position in the early stages of a bounce is great way to get on board an up-trending stock. The "Bullish Bounce" setup identifies probable candidates by evaluating the trading action that takes place near support levels. TYRA's behavior on Friday could very well be a sign that a new bounce is underway. Place a BUY trigger at 16.21. In the event your trigger is met, also place a 1.81 trailing stop which can be trimmed down to 0.91 when you have a 3.2 profit. TYRA closed Friday at 15.95. Earnings Report Date: N/A. Beta: N/A. Market-Cap: 676.857M. Optionable.


SL Green Realty Corp. (SLG: Real Estate/REIT-Office) - SQUEEZE PLAY. Friday's trading session left SLG in a very narrow price range after buyers and sellers fought to a near stalemate. Both sides are looking for some traction, and a breakout either way could provide a nice gain in the short term. To get aboard, set your BUY trigger at 20.91 and your SELL short trigger at 18.48. One of the orders will be triggered by upcoming price action. When your market order is filled, cancel the remaining trigger and enter a 2.43 trailing stop. Once you have a 2.64 profit, reduce the stop to 1.22. Earnings Report Date: Apr 18, 2023. Beta: 1.50. Market-Cap: 1.326B. Optionable.


inTEST Corporation (INTT: Technology/Semiconductor Equipment & Materials) - SQUEEZE PLAY. The ticker for Friday's session shows INTT is now stuck in a tight price band. With the cyclical contraction and expansion nature of volatility in force, we should see a new period of price expansion in the days ahead. To improve the odds of catching the next directional wave, place a BUY trigger at 21.37 and a SELL short trigger at 19.52. When INTT starts moving out of its narrow range, your order will be triggered. Once you're in the trade, cancel the opposing trigger and set a 1.85 trailing stop. Upon reaching a 1.66 profit, resize the stop to 0.93. Earnings Report Date: May 04, 2023. Beta: 1.93. Market-Cap: 223.889M. 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.

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Stocks Covered Today    Stock Splits      Trader's Corner

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.

Editorial    Quick List    Market Summary    Technical Analyst    Market Calendar   
Stocks Covered Today    Stock Splits      Trader's Corner

Trader's Corner

Breakout Trading

Significant declines evolve into long bottoms characterized by failed rallies and retesting of prior lows. As new accumulation slowly shakes out the last crowd of losers, a stock's character changes. Prices push toward the top of key resistance. Short-term relative strength improves and charts print a series of bullish price bars with closing ticks near their highs. Finally the issue begins a steady march through the wall marked by previous failures.

Stocks must overcome gravity to enter new uptrends. Value players build bases but can't supply the critical force needed to fuel rallies. Fortunately, the momentum crowd will arrive just in time to fill this chore. As a stock slowly rises above resistance, greed rings a loud bell and these growth players jump in all at the same time.

The appearance of a sharp breakout gap has tremendous buy power. But the skilled trader should remain cautious unless the move is accompanied by heavy volume. Bursts of enthusiastic buying should draw wide attention, which ignites further price expansion. When volume fails to show, the gap may quickly fill and trap the emotional longs.

Non-gapping, high volume surges provide a comfortable price floor similar to gaps. But support may be more difficult to measure. And momentum can take longer to develop, forcing a stock to swing into a new range rather than rise quickly. Fortunately this scenario also sets up pullback trades as support forces profitable bounces.

The uptrend terrain faces predictable obstacles marked by Clear Air pockets and congestion from prior downtrends. These barriers force frequent dips that mark good buying opportunities. The trader must identify these profitable zones in advance but also recognize that dips will disappear during the strongest rallies. Here price blasts through prior resistance as enthusiasm explodes.

During uptrends, one goal is to locate runaway expansion moves. As trend builds momentum, both gapping and non-gapping surges will register on technical indicators, such as MACD or ADX. Short pullbacks should not violate the math of this developing strength. As volatility absorbs each surge, more powerful rallies should erupt. During these events, price range and volume will expand bar to bar, often culminating in a second (continuation) gap and a final exhaustion spike.

Break and Run

Gap breakouts are more likely to rise toward higher prices immediately than simple volume breakouts. Waiting for a dip may be futile. Extreme crowd enthusiasm ignites continued buying at higher levels and market makers don't need pullbacks to generate volume. If entry is desired, use a trend-following strategy and manage risk with absolute price or percentage loss stops.

Traders Corner Image

This instructive article was written by Alan Farley, author of "The Master Swing Trader."

RightLine Risk Control Calculator 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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