March 26, 2024 - The RightLine Report ********************************** NOTES FROM THE EDITOR **********************************
Unexpected volatility is a fact of life in the stock market. For traders holding at least a few days, it's important to keep stop losses wide enough to ride out the daily gyrations - while at the same time, keeping risk to a manageable minimum. It's a balancing act that's easier said than done.
*********************************** "QUICK LIST" *********************************** Stock 03/27 03/27 Buy Short Trailing Stops Gain Symbol Price +/- Entry Entry Initial/Tighten Amount ------ -------- -------- -------- -------- --------------- -------- BOWL 13.36 0.29 13.62 0.86/0.43 1.22 AORT 20.53 0.51 20.89 1.41/0.71 1.16 LBPH 20.11 0.27 20.74 19.22 1.52/0.76 3.04 RNA 24.05 0.85 24.71 22.79 1.92/0.96 2.98 AKRO 24.39 0.21 25.33 23.42 1.91/0.96 6.02 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/ ***************************** MARKET SUMMARY ***************************** Equity markets closed lower on Tuesday, with the S&P 500 logging a decline of roughly 0.3% for the day. Health care emerged as the top-performing sector, gaining about 0.3%, while utilities lagged behind, shedding over 1%. In overseas markets, European markets mostly finished higher following a better-than-expected consumer confidence reading in Germany. On the US economic front, new orders for manufactured durable goods increased by 1.4% month-over-month in February, rebounding from two consecutive monthly declines. Additionally, the consumer confidence index reading for March fell slightly below market expectations, driven by reduced optimism surrounding future business conditions, labor-market conditions, and income expectations. Treasury yields ticked modestly lower on the day, with the 2-year yield finishing around 4.59% and the 10-year yield at 4.23%. Equity leadership has broadened over the past month. Stocks have continued their momentum from 2023, with the S&P 500 reaching all-time highs and currently up by about 10% year-to-date. Following their substantial gains in 2023, the information technology and communication services sectors once again emerged as the top-performing sectors in 2024, each gaining over 13%. From a style perspective, growth has once again outperformed value at the start of the year. The Russell 1000 Growth Index has risen by roughly 12% year-to-date compared to around 7% for the Russell 1000 Value Index. However, the past month has witnessed a broader leadership, with energy, utilities, and materials emerging as the top-performing sectors. Over the same period, value-style stocks have gained 3.8% compared to a 2.4% gain for growth-style stocks. Looking ahead, we anticipate a more balanced performance between growth- and value-style stocks, with some of the laggards from 2023 potentially catching up throughout 2024. Potential catalysts for broader participation in equity markets could include lower inflation, a Federal Reserve that pivots to interest rate cuts around midyear, and improving earnings trends in value-style stocks. Mar 25, 2024 Mar 26, 2024 -------------------- -------------------- Dow 39,313.64 -162.26 39,392.09 78.45 Nasdaq 16,384.47 -44.35 16,426.05 41.58 S&P 500 5,218.19 -15.99 5,227.36 9.17 NYSE Volume 3.34B 3.88B NYSE Advancers 1,173 1,255 NYSE Decliners 1,632 1,535 Nasdaq Volume 4.65B 5.15B Nasdaq Advancers 1,740 1,769 Nasdaq Decliners 2,479 2,464 New Highs/Lows 03/19 03/20 03/21 03/22 03/25 03/26 -------------------------------------------- NYSE New Highs 175 292 440 233 176 147 NYSE New Lows 34 32 17 20 25 33 Nasdaq New Highs 93 226 342 127 112 119 Nasdaq New Lows 126 99 55 93 110 126 *********************************** TRADER'S TIP: *********************************** TRADER'S TIP: "Moving Average Rainbows" Place a variety of moving averages on your chart, then watch how they crossover each other and fan out into a "rainbow." The patterns that are drawn as the trend unfolds will indicate the strength of a reversal. Try 13, 22, and 50 period Exponential Moving Averages to see how it works. This combination has shown to be effective under a wide range of conditions. Take notice of any similarities in the rainbows that have occurred historically, with particular attention to the way the rainbow takes shape after bouncing from support or resistance. This is a helpful tool to avoid head fakes, and determine true trend reversals in almost any time frame. ************************** THE TECHNICAL ANALYST ************************** 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/032624SPX.jpg--ECONOMIC REPORTS AND EVENTS (all times are Eastern): MONDAY, MARCH 25 10:00 am New home sales TUESDAY, MARCH 26 8:30 am Durable-goods orders 8:30 am Durable-goods minus transportation 9:00 am S&P Case-Shiller home price index (20 cities) 10:00 am Consumer confidence WEDNESDAY, MARCH 27 None scheduled THURSDAY, MARCH 28 8:30 am Initial jobless claims 8:30 am GDP (2nd revision) 9:45 am Chicago Business Barometer (PMI) 10:00 am Pending home sales 10:00 am Consumer sentiment (final) FRIDAY, MARCH 29 8:30 am Advanced U.S. trade balance in goods 8:30 am Advanced retail inventories 8:30 am Advanced wholesale inventories 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) 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/ *********************************** TRADER'S TIP: *********************************** TRADER'S TIP: "Short-term Trading = Long Term Results" Occasionally we hear from traders who are frustrated and can't seem to do anything right. They usually haven't made money for a while and are starting to feel as if they never will. The problem could be thinking short-term -- not about their trades but about their results. Even if your trades last only minutes or hours, you have to think about your results over the long term. The laws of probabilities allow for losing streaks which can sometimes run longer than you think is possible. Realize that when you have a run of losers, it doesn't necessarily reflect your skill as a trader. Every trader - no matter how good - has some periods of time when they do poorly. The most important thing you can do is to keep working at it day after day. When combined with Risk Management, persistence and hard work lead to good results. *********************************** STOCKS COVERED IN THIS ISSUE *********************************** CONSUMER CYCLICAL SECTOR Bowlero Corp. (BOWL: Consumer Cyclical/Leisure) - 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. BOWL's behavior on Tuesday could very well be a sign that a new bounce is underway. Place a BUY trigger at 13.62. In the event your trigger is met, also place a 0.86 trailing stop which can be trimmed down to 0.43 when you have a 1.22 profit. BOWL closed Tuesday at 13.36. Earnings Report Date: May 17, 2024. Beta: 0.48. Market-Cap: 2B. Optionable. HEALTHCARE SECTOR Artivion, Inc. (AORT: Healthcare/Medical Devices) - 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 AORT which met our setup criteria on Tuesday. The BUY trigger for this trade is at 20.89, and the trailing stop is sized at 1.41. Resize the stop to 0.71 upon collecting a 1.16 point gain. AORT closed Tuesday at 20.53. Earnings Report Date: May 02, 2024. Beta: 1.66. Market-Cap: 846.351M. Optionable. Longboard Pharmaceuticals, Inc. (LBPH: Healthcare/Biotechnology) - SQUEEZE PLAY. Trader indecision has put LBPH squarely in the center of a Bull versus Bear standoff. This tight spot should soon give way to a clear winner in the short-term, and we want to be in position for the move. To do that we've set a BUY entry at 20.74 and a SELL short entry at 19.22. Now it's up to LBPH to show us which entry will be filled. Once the trade is underway place a 1.52 trailing stop, which can be tightened to 0.76 after you achieve a 3.04 profit. LBPH closed on Tuesday at 20.11. Earnings Report Date: May 07, 2024. Beta: 1.29. Market-Cap: 724.306M. Optionable. Avidity Biosciences, Inc. (RNA: Healthcare/Biotechnology) - SQUEEZE PLAY. The struggle between buyers and sellers has resulted in RNA'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 24.71 and a SELL order at 22.79. Regardless of which order is triggered, cancel the other one and follow your entry with a 1.92 trailing stop. Tighten the stop to 0.96 once you have a 2.98 gain. RNA closed Tuesday at 24.05. Earnings Report Date: May 07, 2024. Beta: 0.71. Market-Cap: 1.917B. Optionable. Akero Therapeutics, Inc. (AKRO: 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. AKRO traders reached this state of stand-off on Tuesday with the tightest range of the past seven days. You can take advantage of their efforts by placing a low risk BUY trigger at 25.33 and a SELL short trigger at 23.42. After one of the two orders is filled, cancel the un-triggered order and place a trailing stop at 1.91 which can be tightened to 0.96 on a 6.02 gain. AKRO closed Tuesday at 24.39. Earnings Report Date: May 13, 2024. Beta: -0.37. Market-Cap: 1.682B. 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 *********************************** 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! ********** If you prefer to receive this report in html with color and graphics, or have any questions, send us an email using our contact form at:https://prorightline.com/index.php/contact-us/ ====================================================================== DISCLAIMER The RightLine Report is an information service for investors and traders. 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