Notes From The Editor

There are days when market volatility is so high even the most prudent among us are tempted to engage in a bit of intra-day trading. We're like surfers standing on the beach with boards under our arms, watching the big swells roll in.

So how do we trade a market like this? First, high volatility provides dream conditions for short-term intra-day traders. Wide, long swings that trend up and down for up to an hour at a time are ideal for quick trades.

One simple method for surfing these waves is to use trend lines to locate support and resistance on five-minute real-time bar charts. If you want to go long, just wait for prices to bounce from a decline, then draw an uptrend line along the bottoms of the first two or three 5-minute bars in the rebound.

Shares will usually rise some and then drop back down to the trendline. The signal to buy comes at the point of contact when prices have just touched the line. Follow the entry with a trailing stop just below the rising trendline.

Intra-day shorting works the same way, just use a down trendline instead of an up trendline. You may have to experiment with drawing the line above or below the bars to find what works best. Be sure to use a trailing stop in either case.

This method works well on many stocks, though it does require you to stay alert. Of course, always use the RightLine Risk Control Calculator when choosing your position size to protect against losses. Use a smaller amount of shares than usual in order to get a feel for this quick style of trading. Look for small gains of a point or so depending on the stock's individual volatility.

Trade well!

~Thomas Sutton, Editor

Quick List

    
Stock     03/28     03/28      Buy      Short   Trailing Stops     Gain 
Symbol    Price      +/-      Entry     Entry   Initial/Tighten   Amount 
------  --------  --------  --------  --------  ---------------  --------

SRDX      29.34      0.54               28.28        1.84/0.92      2.16
SGRY      29.83     -0.11     30.65     28.71        1.94/0.97      2.86
PAY       22.75      0.27     23.14                  1.36/0.68      2.64
CRDO      21.19     -0.01     21.83      20.3        1.53/0.77      2.52
ACMR      29.14      0.43     29.99     27.74        2.25/1.13      4.76

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.

Market Summary

Equities closed slightly higher on Thursday, propelling the S&P 500 to a fresh record high and marking its best first-quarter gain in five years. The day lacked major headlines driving market action, as investors remained focused on the overall health of the labor market and inflation trends. Consequently, markets appeared to tread water in anticipation of the important Personal Consumption Expenditures (PCE) inflation report scheduled for Friday.

Globally, equities, gold, and oil prices generally rose, while interest rates saw a slight uptick, with the 10-year Treasury yield hovering around 4.2%. This stability suggests that markets have adjusted to the likelihood of the Fed delaying rate cuts until at least the summer. This week's report on initial jobless claims revealed a drop to 210,000, marking the second-lowest reading since early January. Although continuing claims increased slightly over the past year, they remain consistent with a robust job market.

While the labor market remains tight with low unemployment and ongoing job growth, signs of softness are emerging in discretionary purchases, as indicated by recent announcements from major retailers. This aligns with expectations of slower GDP growth this year, offset by improvements in manufacturing and business investment alongside resilient household consumption.

The focus now turns to the Personal Consumption Expenditures (PCE) inflation report due on Friday, which is the Fed's preferred measure of inflation. With recent Consumer Price Index (CPI) readings surpassing expectations, markets are keen to observe the PCE trend, which could influence upcoming Fed decisions. Consensus forecasts anticipate a decline in core PCE (excluding food and energy) compared to the previous month, potentially confirming a moderation in consumer price increases.

As inflation and employment conditions remain pivotal for future Fed rate decisions, both Thursday's PCE reading and next week's monthly payrolls report are anticipated to provide valuable insights. While the outlook for this year remains favorable, any deviations from expectations in these reports could introduce volatility to the markets, which have experienced minimal fluctuations so far in 2024.

                        Mar 27, 2024           Mar 28, 2024   
                  --------------------   --------------------
Dow                 39,565.42   283.09     39,824.15    64.07
Nasdaq              16,312.44    -3.26     16,390.30    -9.22
S&P 500              5,219.70    16.12      5,258.76    10.27

NYSE Volume                      3.86B                  4.01B
NYSE Advancers                   2,336                  1,788
NYSE Decliners                     499                  1,042

Nasdaq Volume                    4.78B                  5.19B
Nasdaq Advancers                 3,109                  2,499
Nasdaq Decliners                 1,149                  1,766

                                 New Highs/Lows

                   03/21  03/22  03/25  03/26  03/27  03/28
                 --------------------------------------------
NYSE New Highs       440    233    176    147    241    370
NYSE New Lows         17     20     25     33     12     12
Nasdaq New Highs     342    127    112    119    196    269
Nasdaq New Lows       55     93    110    126     78     50
   

TRADER'S TIP: "Hot Zones"

While up and down price behavior reflects the impact of news and sentiment, heavy hitters like market makers and institutional traders use technical analysis to locate potential breakout and reversal zones. Some of these areas are easy to see, for they line up with previous high and low pivot points. Others are less obvious. Trend lines, Bollinger Bands, Fibonacci overlays, and other technical tools are used to locate the hot spots. Where two or more of these converge, support or resistance is stronger. Bullish moves beyond these limits occur when sellers give in and join the buyers. Bearish moves occur in the same fashion, only in reverse.

As traders we can anticipate these points, and manage positions by preparing for possible breakouts or reversals at these junctions. It doesn't pay to be stubborn! If a trade tells us it wants to break through support or resistance, we can play it that way. If it decides to reverse, we can follow along. One measure of a trader's strength is the ability to quickly adapt and go with the current price flow. To a large degree, this is what is meant by the saying, "let the market tell you what to do."

The Technical Analyst

For help with this chart, be sure to read "Understanding The Importance Of Support And Resistance"
and "Improve Your Trading With Moving Averages".

Market Calendar

ECONOMIC REPORTS AND EVENTS (all times are Eastern):    

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)

MONDAY, APRIL 1					
9:45 am	S&P U.S. manufacturing PMI (final)	
10:00 am	Construction spending	
10:00 am	ISM manufacturing	

TUESDAY, APRIL 2					
10:00 am	Factory orders	
10:00 am	Job openings	
9:05 am	Chicago Fed President Austan Goolsbee speaks				
12:05 pm	Cleveland Fed President Loretta Mester speaks				
1:30 pm	San Francisco Fed President Mary Daly speaks				
TBA	U.S. auto sales	

WEDNESDAY, APRIL 3					
8:15 am	ADP employment	
9:45 am	S&P U.S. services PMI (final)	
10:00 am	ISM services
12:00 pm	New York Fed President John Williams moderates discussion
				
THURSDAY, APRIL 4					
8:30 am	Initial jobless claims				
8:30 am	U.S. trade balance	
10:00 am	Philadelphia Fed President Patrick Harker speaks				
12:15 pm	Richmond Fed President Tom Barkin speaks				
12:45 pm	Chicago Fed President Austan Goolsbee speaks				
2:00 pm	Cleveland Fed President Loretta Mester speaks
				
FRIDAY, APRIL 5					
8:30 am	U.S. nonfarm payrolls	
8:30 am	U.S. unemployment rate	
8:30 am	U.S. hourly wages	
8:30 am	Hourly wages year over year			
9:15 am	Richmond Fed President Tom Barkin speaks				
3:00 pm	Consumer credit


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

TRADER'S TIP: "After Hours"

Participation by Market Makers in after hours trading is strictly voluntary, which as a result may offer less liquidity and inferior prices. Because of this limited liquidity, the prices you see provide little information as to how the stock will perform during the following session.

Stocks Covered in This Issue

HEALTHCARE SECTOR

Surmodics, Inc. (SRDX: Healthcare/Medical Devices) - BEARISH U-TURN. During Thursday's trading action, SRDX encountered solid resistance near its 50 EMA (Exponential Moving Average) and looks ready for a possible reversal. The resulting Bearish U-Turn set-up is the basis for a potential SHORT play, so get ready to enter a position in SRDX on a further decline to our trigger at 28.28. Set a 1.84 trailing stop, tightening to 0.92 on a 2.16 gain. SRDX ended the latest session at 29.34. Earnings Report Date: Apr 24, 2024. Beta: 1.01. Market-Cap: 417.684M. Optionable.

Surgery Partners, Inc. (SGRY: Healthcare/Medical Care Facilities) - SQUEEZE PLAY. SGRY 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. SGRY closed Thursday at 29.83. The plan is to enter in the right direction by placing a BUY trigger at 30.65 and a SELL short trigger at 28.71. Once SGRY establishes direction, place your triggered order. As soon as you are in the trade, place a trailing stop in the amount of 1.94. After you've collected a 2.86 profit, tighten the stop to 0.97. Earnings Report Date: Apr 29, 2024. Beta: 2.72. Market-Cap: 3.777B. Optionable.

TECHNOLOGY SECTOR

Paymentus Holdings, Inc. (PAY: Technology/Software - Infrastructure) - BULLISH BOUNCE. Positive price behavior near moving average support on Thursday qualifies PAY for a Bullish Bounce setup. After several sessions of declining prices, PAY should soon begin trading in step with its established weekly uptrend. Tell your broker to BUY shares if PAY moves up to our entry trigger set at 23.14. You can also enter a 1.36 trailing stop, to be replaced with a 0.68 trailing stop when you obtain a 2.64 profit. PAY closed Thursday at 22.75. Earnings Report Date: N/A. Beta: 1.40. Market-Cap: 2.819B. Optionable.

Credo Technology Group Holding Ltd (CRDO: Technology/Communication Equipment) - SQUEEZE PLAY. CRDO 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 21.83 and a SELL short trigger at 20.3. When one of the orders is filled, cancel the remaining order and enter a 1.53 trailing stop. When you've reached a 2.52 paper profit, tighten the stop to 0.77. CRDO closed at 21.19 on Thursday. Earnings Report Date: May 29, 2024. Beta: 2.00. Market-Cap: 3.46B. Optionable.

ACM Research, Inc. (ACMR: Technology/Semiconductor Equipment & Materials) - 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. ACMR 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 29.99 and a SELL short trigger at 27.74. When ACMR 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 2.25 trailing stop. After you've got a 4.76 profit, tighten the stop to 1.13. ACMR closed at 29.14 on Thursday. Earnings Report Date: May 03, 2024. Beta: 1.41. Market-Cap: 1.78B. 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  
---------------- -------     --------    -------     ------  -------   

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.

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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