Notes From The Editor

Stocks are on the move again. Three consecutive rally days after weeks of some of the hardest selling in history. So is now the time to buy?

Everyone knows how important it is to buy a stock at the "right" price and time. Yet when it comes down to the moment of truth, traders often have doubts about whether they should pull the trigger. This type of uncertainty causes some folks to just sit on their hands and watch the action from the sidelines. Despite a longing desire to trade stocks profitably, they can't seem to press the BUY button.

Fortunately there's a simple way to deal with this common problem.

Instead of worrying about whether the time is really "right" to get in, spend a few minutes planning what to do if it DOES turn out to be the right time, or if it DOESN'T ... once you ARE in. In other words, what will you do if the trade moves in your favor? And what will you do if the price moves in the wrong direction?

You can easily answer these questions by asking a few more. Do you plan to use an initial stop? Where will you set it? If the trade moves to your advantage, at what point will you move the stop up? If the trade moves against your position, are you willing to exit without hesitation at the pre-planned level?

Pre-planning the details of your trade management before you get into a position is much more important than finding exactly the "right" entry. But how do you get past the uncertainty at the moment of truth, that exact moment when you have to click the order button?

Luckily today's online brokerage technology allows us to implement our trading plans without having to "pull the trigger" real-time. We can now automate our entries and exits by setting the exact price to enter and exit well in advance of the actual entry. Many brokerages also allow clients to set trailing stops, so there's no reason for to worry about losing a lot of money on a bad trade.

Entering the details of a trade into your brokerage account and then letting the system take care of managing the trade is a good way to begin dealing with the uncertainty that keeps some of us from fulfilling our desires.

One final thought. Whenever you have lingering doubts about entering a well-planned trade, just reduce the number of shares in the position to a bare minimum. This will compensate for any over-sensitivity to risk. In time your confidence will go up as you gain experience and accumulate profits.

Trade well,

- Thomas Sutton, Editor

Quick List

    
Stock     03/26     03/26      Buy      Short   Trailing Stops     Gain 
Symbol    Price      +/-      Entry     Entry   Initial/Tighten   Amount 
------  --------  --------  --------  --------  ---------------  --------

MHO       20.02     -0.13     20.94     17.83        3.11/1.55      4.32
TNK       20.28      0.70     20.61     18.04        2.57/1.28      4.12
MSON      10.22      0.87     10.48      9.43        1.05/0.53      2.32
KBR       21.26      1.61     21.65     19.26        2.39/1.20      3.42

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 access to the Risk Calculator, go to http://www.rightline.net and login to the Member's area.

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

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Market Summary

Stocks closed higher on Thursday to lock in the first three-day winning streak since the COVID-19 pandemic began disrupting global economic markets five weeks ago. Thursday's bullish price action came despite a record high in unemployment claims and was likely fueled by the recent massive fiscal and monetary policy measures from Congress and the Federal Reserve Bank. In other economic news, GDP/Gross Domestic Product growth was unrevised at a 2.1% annual pace. Oil prices, the USD/dollar and treasury yields were all lower, gold moved higher.

                        Mar 25, 2020           Mar 26, 2020   
                  --------------------   --------------------
Dow                    21,201  +495.64        22,552   +1,352
Nasdaq               7,384.30   -33.56      7,797.54  +413.24
S&P 500                 2,476   +28.23         2,630  +154.51

NYSE Volume                      8.32B                  7.80B
NYSE Advancers                    2423                   2649
NYSE Decliners                     587                    369

Nasdaq Volume                    4.68B                  4.01B
Nasdaq Advancers                  2225                   2727
Nasdaq Decliners                  1102                    583

                                 New Highs/Lows

                   03/19  03/20  03/23  03/24  03/25  03/26
                 --------------------------------------------
NYSE New Highs         5      1      2      1      3      4
NYSE New Lows       1051    299    805     87     54     21
Nasdaq New Highs      13      8      7      8      5      5
Nasdaq New Lows      811    336    783    115     72     31
   

TRADER'S TIP: "Sunny Days"

Researchers at Ohio State and the University of Michigan found a positive correlation between the weather and the stock markets around the globe between 1982 and 1997. Specifically, the stock markets in 26 countries 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 "Boost Your Profits With Moving Averages".

S&P 500 - 2630.07 March 26, 2020

52-Week High: 3393.52
52-Week Low: 2191.86
Daily Trend: UP
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 2947.72
Resistance 2: 2665.26
Resistance 1: 2485.09
Pivot: 2382.80
Support 1: 2202.63
Support 2: 2100.34
Support 3: 1817.88


NASDAQ Composite - 7797.54 March 26, 2020

52-Week High: 9838.37
52-Week Low: 6631.42
Daily Trend: UP
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 8467.70
Resistance 2: 7731.86
Resistance 1: 7305.69
Pivot: 6996.02
Support 1: 6569.85
Support 2: 6260.18
Support 3: 5524.34
        
Dow Industrials - 22552.17 March 26, 2020

52-Week High: 29568.57
52-Week Low: 18213.65
Daily Trend: UP
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 25654.88
Resistance 2: 22804.06
Resistance 1: 20989.02
Pivot: 19953.24
Support 1: 18138.20
Support 2: 17102.42
Support 3: 14251.60
 

Market Calendar

ECONOMIC REPORTS AND EVENTS (all times are Eastern):    

Monday, March 23, 2020:
23-Mar  8:30 am   Chicago Fed national activity

Tuesday, March 24, 2020:
24-Mar  9:45 am   Markit manufacturing PMI (flash)
24-Mar  9:45 am   Markit services PMI (flash)
24-Mar  10 am   New home sales

Wednesday, March 25, 2020:
25-Mar  8:30 am   Durable goods orders
25-Mar  8:30 am   Core capital goods orders

Thursday, March 26, 2020:
26-Mar  8:30 am   Weekly jobless claims
26-Mar  8:30 am   GDP
26-Mar  8:30 am   Advance trade in goods

Friday, March 27, 2020:
27-Mar  8:30 am   Personal income
27-Mar  8:30 am   Consumer spending
27-Mar  8:30 am   Core inflation
27-Mar  10 am   Consumer sentiment



For a chart of typical Up or Down market reactions to specific major US economic reports 
go to:  Economic Indicator Effects

TRADER'S TIP: "Use More Than One Indicator"

Instead of relying on just one indicator to make trade decisions, use several as part of your overall strategy. Watch for a convergence of signals because it increases the odds of the expected outcome.

Stocks Covered in This Issue

CONSUMER CYCLICAL SECTOR

M/I Homes, Inc. (MHO: Consumer Cyclical/Residential Construction) - SQUEEZE PLAY. A look at MHO's daily chart shows what a price squeeze is all about. The constricted high-low daily trading range has produced a setup similar to a tightly coiled spring. Expect price to move sharply soon, with the direction yet to be determined. Let the upcoming market action resolve whether you will buy shares or sell short. To capture a move either way, place a BUY trigger at 20.94 and a SELL short trigger at 17.83. Once MHO shows which way it's headed, place your triggered entry order. As soon as your order is filled, follow with a trailing stop of 3.11 and tighten to 1.55 on a 4.32 gain. MHO closed Thursday at 20.02. Earnings Report Date: Apr 21, 2020. Beta: 1.01. Market-Cap: 572.142M. Optionable.

ENERGY SECTOR

Teekay Tankers Ltd. (TNK: Energy/Oil & Gas Midstream) - SQUEEZE PLAY. Thursday's trading action forced TNK's daily price range into an abnormally narrow state. This translates into opportunity; for the cyclical nature of price volatility is to shrink extensively, then swell rapidly as shares move in one direction or another. Instead of trying to predict the direction TNK will take when price volatility begins to increase, we'll set both a BUY (long) and a SELL (short) trigger to get us into the right trade. Be ready to BUY shares at 20.61 if TNK moves higher, and place your order to SELL short at 18.04 if price declines to that level. As usual follow your entry with a trailing stop, 2.57 should be sufficient. Reduce your stop to 1.28 on a 4.12 gain. TNK closed Thursday at 20.28. Earnings Report Date: May 20, 2020. Beta: 1.16. Market-Cap: 681.915M. Optionable.

HEALTHCARE SECTOR

Misonix, Inc. (MSON: Healthcare/Medical Devices) - SQUEEZE PLAY. When a stock's daily price range contracts to an unusually low point, you can safely assume that in most cases a breakout from that range will result in a nice price move. To capture a portion of this potential movement we have set both a long and a short entry into MSON. A move to the upside will trigger our BUY entry at 10.48, while a drop to 9.43 will trigger our SELL short entry. Follow your position with a 1.05 trailing stop. Tighten the stop to 0.53 once you have a 2.32 gain. MSON closed Thursday at 10.22. Earnings Report Date: N/A. Beta: 0.71. Market-Cap: 177.422M. Optionable.

INDUSTRIALS SECTOR

KBR, Inc. (KBR: Industrials/Engineering & Construction) - SQUEEZE PLAY. KBR is caught in a dilemma. The stock's compressed price range on Thursday has resulted in a condition comparable to a wound up rubber band. We anticipate that this undecided equity will take off soon, but with the direction still in question we'll let upcoming market action tell us whether to buy shares or sell short. KBR is now at 21.26. We can capture price action either way by placing a BUY trigger at 21.65 and a SELL short trigger at 19.26. Once KBR reveals its direction, enter your triggered order and disregard the other one. As soon as your position is in place, follow up with a trailing stop of 2.39. When you acquire a 3.42 profit, tighten the stop to 1.20. Earnings Report Date: Apr 28, 2020. Beta: 1.40. Market-Cap: 3.018B. 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.

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  
---------------- -------     --------    -------     ------  -------   

Currently there are no upcoming stock splits on the major US exchanges.
    

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 to all RightLine subscribers. For access, go to http://www.rightline.net and login to the Member's area.

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