March 29, 2022 - The RightLine Report
Notes From The Editor
We've all experienced bad days in the stock market. Yes, I know we should learn from them, yet it still feels lousy to lose money. Entering a new trade only to see it immediately head in the wrong direction can be more of a burning experience than a learning experience.
It helps to remember that we're really just playing an odds game. Sometimes trades go our way and sometimes they don't. By maintaining a sufficient edge and keeping our losses to a minimum, we steadily ratchet our profits higher. Winners grow when we use reasonable stop placement that allows for normal daily price fluctuations. As these profitable trades grow, we watch for any losers to appear and quickly eliminate them.
The market is always in constant motion. We have to anticipate the possible impact of price movement on our stocks and be ready to take action at the appropriate time. It really doesn't matter when that moment arrives if we are prepared and willing to follow through when the time comes.
Take as much time as you need to plan what you will do in response to what the market does. Decide what action you will take if prices go up, or if they go down. Don't generalize, be specific.
Decide early in the game just how far price can go before you will definitely do something - like adjusting a trailing stop, or exiting a position to either take profits or prevent losses.
The details of managing positions can in large part be answered by asking two simple questions - "What and When." As far as these two are concerned, the specifics do matter.
Instead of approximating or waiting to decide what to do when you get there, determine your exit strategy in advance. When using a trailing stop method to lock in gains, make certain that you know exactly when to adjust the trailing stop.
Remember the saying "The trend is your friend?" The words "What & When" can also be added to your list of best and closest friends.
Trade well,
- Thomas Sutton, Editor
Stocks Covered Today Stock Splits
Quick List
Stock 03/29 03/29 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
------ -------- -------- -------- -------- --------------- --------
BRCC 20.01 0.05 20.47 18.71 1.76/0.88 3.06
BTU 23.70 -0.73 24.06 2.83/1.42 5.76
ROCC 35.88 0.94 36.53 4.41/2.21 5.64
STOK 23.33 1.12 23.68 1.89/0.95 2.26
USAK 22.05 0.57 22.38 20.94 1.44/0.72 3.06
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
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Stocks Covered Today Stock Splits
Market Summary
The major US stock averages moved higher on Tuesday, climbing the wall of worry built by the ongoing Russian invasion of Ukraine and the Fed Banks's expected monetary policy tightening. Economic headlines featured home prices that continue to rise, an increase in consumer confidence, and a robust number of job openings. In equities, Nielsen (NLSN $27) agreed to be acquired by a group of private equity firms for about $16.0 billion, while UnitedHealth Group (UNH $511) announced an agreement to acquire LHC Group (LHCG $167) for roughly $5.4 billion. Oil prices, gold and the USD/dollar were lower, treasuries ended the session mixed.
Mar 28, 2022 Mar 29, 2022
-------------------- --------------------
Dow 34,955.89 94.65 35,294.19 338.30
Nasdaq 14,354.90 185.60 14,619.64 264.73
S&P 500 4,575.52 32.46 4,631.60 56.08
NYSE Volume 4.38B 5.1B
NYSE Advancers 1,642 2,744
NYSE Decliners 1,705 641
Nasdaq Volume 5.11B 6.06B
Nasdaq Advancers 2,298 3,650
Nasdaq Decliners 2,467 1,223
New Highs/Lows
03/22 03/23 03/24 03/25 03/28 03/29
--------------------------------------------
NYSE New Highs 82 82 95 169 75 117
NYSE New Lows 74 80 98 187 139 74
Nasdaq New Highs 82 65 77 91 67 92
Nasdaq New Lows 130 114 103 168 162 78
Stocks Covered Today Stock Splits
TRADER'S TIP: "Charles Dow's Three Trends"
Charles Dow - who developed the Dow Jones Averages - taught that there are always three "trends" occurring in the stock market at the same time.
~ The first trend is the Primary Trend, which can be either bullish or bearish. These trends tend to last anywhere from a year up to several years, and can sometimes run for much longer.
~ The next trend is the Secondary Trend. These "counter trends" move in the opposite direction to the Primary Trend, and usually last anywhere from a week to a few months. They present themselves as rallies in Bear markets and pullbacks, or corrections in Bull markets. Secondary trends will often retrace between one-third to two-thirds of the most recent prior secondary trend.
~ The third trend is the Minor Trend. These are the very short-term intra and inter day trends that Dow referred to as "Tertiary Movements." Though it may seem like a paradox at first, it's easy to see these three separate trends at work simultaneously when looking at stock charts in monthly, weekly, daily, and intra-day time frames.
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".
S&P 500 - 4631.60 March 29, 2022
52-Week High: 4818.62
52-Week Low: 3944.35
Daily Trend: UP
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 4747.92
Resistance 2: 4626.19
Resistance 1: 4584.62
Pivot: 4504.46
Support 1: 4462.89
Support 2: 4382.73
Support 3: 4261.00
NASDAQ Composite - 14619.64 March 29, 2022
52-Week High: 16212.23
52-Week Low: 12555.35
Daily Trend: UP
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 15095.95
Resistance 2: 14559.74
Resistance 1: 14364.52
Pivot: 14023.53
Support 1: 13828.31
Support 2: 13487.32
Support 3: 12951.11
Dow Industrials - 35294.19 March 29, 2022
52-Week High: 36952.65
52-Week Low: 32071.41
Daily Trend: UP
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 35917.03
Resistance 2: 35316.14
Resistance 1: 35088.69
Pivot: 34715.25
Support 1: 34487.80
Support 2: 34114.36
Support 3: 33513.47
Stocks Covered Today Stock Splits
Market Calendar
ECONOMIC REPORTS AND EVENTS (all times are Eastern): Monday, March 28, 2022: 28-Mar 8:30 am Trade in goods, advance report Tuesday, March 29, 2022: 29-Mar 9 am Case-Shiller national house price index (year-on-year) 29-Mar 9 am FHFA national house price index (year-on-year) 29-Mar 10 am Consumer confidence index 29-Mar 10 am Job openings 29-Mar 10 am Quits Wednesday, March 30, 2022: 30-Mar 8:15 am ADP employment report 30-Mar 8:30 am GDP revision (SAAR) 30-Mar 8:30 am Gross domestic income (SAAR) 30-Mar 8:30 am Corporate profits (year-on-year) Thursday, March 31, 2022: 31-Mar 8:30 am Initial jobless claims 31-Mar 8:30 am Continuing jobless claims 31-Mar 8:30 am Nominal personal income 31-Mar 8:30 am Nominal consumer spending 31-Mar 8:30 am PCE price index 31-Mar 8:30 am Core PCE price index 31-Mar 8:30 am PCE price index (year-on-year) 31-Mar 8:30 am Core PCE price index (year-on-year) 31-Mar 8:30 am Real disposable income 31-Mar 8:30 am Real consumer spending 31-Mar 9:45 am Chicago PMI Friday, April 01, 2022: 01-Apr 8:30 am Nonfarm payrolls 01-Apr 8:30 am Unemployment rate 01-Apr 8:30 am Average hourly earnings 01-Apr 8:30 am Labor-force participation rate, ages 25-54 01-Apr 9:45 am Markit manufacturing PMI (final) 01-Apr 10 am ISM manufacturing index 01-Apr 10 am Construction spending 01-Apr Varies Motor vehicle sales For a chart of typical Up or Down market reactions to specific major US economic reports go to: Economic Indicator Effects
Stocks Covered Today Stock Splits
TRADER'S TIP: "Let The Trade Come To You"
It rarely pays to chase a stock, so don't chase it - let the trade come to you. You have two options when you realize a move is already underway. Either forget the trade and look for another one, or wait for the price to move back to support or resistance THEN enter on the rebound. Waiting for a pullback usually provides a relatively low risk entry - because you can place a tight stop just beyond the support or resistance level. Remember - don't worry if you miss a trade, there is always another.
Stocks Covered in This Issue
CONSUMER DEFENSIVE SECTOR
BRC Inc. (BRCC: Consumer Defensive/Packaged Foods) - 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. BRCC 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 20.47 and a SELL short trigger at 18.71. After one of the two orders is filled, cancel the un-triggered order and place a trailing stop at 1.76 which can be tightened to 0.88 on a 3.06 gain. BRCC closed Tuesday at 20.01. Earnings Report Date: N/A. Beta: N/A. Market-Cap: 894.677M. Optionable.
ENERGY SECTOR
Peabody Energy Corporation (BTU: Energy/Thermal Coal) - 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 BTU which met our setup criteria on Tuesday. The BUY trigger for this trade is at 24.06, and the trailing stop is sized at 2.83. Resize the stop to 1.42 upon collecting a 5.76 point gain. BTU closed Tuesday at 23.70. Earnings Report Date: Apr 27, 2022. Beta: 1.13. Market-Cap: 3.277B. Optionable.
Ranger Oil Corporation (ROCC: Energy/Oil & Gas E&P) - 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. ROCC's behavior on Tuesday could very well be a sign that a new bounce is underway. Place a BUY trigger at 36.53. In the event your trigger is met, also place a 4.41 trailing stop which can be trimmed down to 2.21 when you have a 5.64 profit. ROCC closed Tuesday at 35.88. Earnings Report Date: May 02, 2022. Beta: 3.06. Market-Cap: 757.617M. Optionable.
HEALTHCARE SECTOR
Stoke Therapeutics, Inc. (STOK: Healthcare/Biotechnology) - BULLISH BOUNCE. Everyone familiar with price charts knows that a stock tends to bounce its way higher rather than move in a straight line. The lower levels of these short-term rebounds offer a safe and often early entry into stocks that are in the process of establishing longer-term uptrends. STOK's reaction to support on Tuesday created a Bullish Bounce setup with a BUY entry trigger at 23.68. Use a 1.89 trailing stop, which should work well with STOK's typical daily range. Tighten it to 0.95 on a 2.26 profit. STOK closed at 23.33 on Tuesday. Earnings Report Date: May 09, 2022. Beta: 0.31. Market-Cap: 871.59M. Optionable.
INDUSTRIALS SECTOR
USA Truck, Inc. (USAK: Industrials/Trucking) - SQUEEZE PLAY. USAK traders on both sides of the fence are now locked in a head-to-head shootout. Tuesday'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 22.38 and a SELL short trigger at 20.94. When one of the orders is filled, cancel the remaining order and enter a 1.44 trailing stop. When you've reached a 3.06 paper profit, tighten the stop to 0.72. USAK closed at 22.05 on Tuesday. Earnings Report Date: Apr 27, 2022. Beta: 1.92. Market-Cap: 196.148M. 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.
Stocks Covered Today Stock Splits
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
---------------- ------- -------- ------- ------ -------
ACM Research ACMR 3/4/2022 3/24/2022 3-for-1 Yes
PAM Transport PTSI 3/9/2022 3/30/2022 2-for-1 Yes
Amazon AMZN 3/9/2022 6/6/2022 20-for-1 Yes
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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