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March 7, 2023 - The RightLine Report
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NOTES FROM THE EDITOR
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Successful traders consistently view the market as it is instead how they might prefer it to be. As a result they take appropriate actions, which in turn produce consistent profits. From this standpoint it's easy to see that trading results are directly linked to our ability to view the market correctly.
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"QUICK LIST"
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Stock 03/07 03/07 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
------ -------- -------- -------- -------- --------------- --------
BILI 20.55 -1.08 21.34 19.71 1.63/0.82 2.16
DRQ 32.56 0.12 33.35 2.58/1.29 2.36
ELVN 21.19 -0.69 22.29 20.44 1.85/0.93 0.7
CORT 21.22 0.01 21.67 20.31 1.36/0.68 1.7
ZIM 21.63 0.06 22.15 1.67/0.84 2.38
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/
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MARKET SUMMARY
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Stocks fell hard on Tuesday following Federal Reserve Bank Chairman Jerome Powell's testimony before the Senate Banking committee. Powell suggested that interest rates may need to go higher for longer in order to offset inflations. The remarks fueled fears of a large rate hike at the next FOMC/Federal Open Market Committee policy meeting. In equities, Dick's Sporting Goods (DKS $147) topped quarterly earnings projections, increased its dividend, and announced guidance for the full-year above forecasts, while Meta Platforms (META $185) is planning more employee layoffs that could affect thousands of workers. From the economic calendar, January consumer credit expanded at a slower pace than expected. The USD/dollar moved higher, oil and gold posted solid losses, and treasury yields were mixed. Mar 6, 2023 Mar 7, 2023
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Dow 33,431.44 40.47 32,856.46 -574.98
Nasdaq 11,675.74 -13.27 11,530.33 -145.40
S&P 500 4,048.42 2.78 3,986.37 -62.05
NYSE Volume 4.02B 3.95B
NYSE Advancers 1,077 630
NYSE Decliners 1,980 2,430
Nasdaq Volume 5.01B 5.45B
Nasdaq Advancers 1,545 1,397
Nasdaq Decliners 3,007 3,109
New Highs/Lows
02/28 03/01 03/02 03/03 03/06 03/07
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NYSE New Highs 80 86 83 124 87 58
NYSE New Lows 36 51 51 18 23 49
Nasdaq New Highs 104 100 95 99 93 62
Nasdaq New Lows 102 132 163 66 93 154
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TRADER'S TIP:
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TRADER'S TIP: "Drawdown" A drawdown is a reduction in account value due to a series of trading losses or from a decrease in the price of investments. It is usually stated either in percentage or dollar terms, and is measured from peak to valley. For example, if a trading account with an initial amount of $10,000 rose in value to $40,000, then dropped to $30,000, then increased again to $50,000, the account would have a maximum drawdown of $10,000 (which occurred when the account dropped from $40,000 to 30,000) even though the account was never in a negative position from the beginning. **************************
THE TECHNICAL ANALYST
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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/ S&P 500 - 3986.37 March 7, 2023 52-Week High: 4637.30 52-Week Low: 3491.58 Daily Trend: UP Weekly trend: UP Weekly Pivot Levels Resistance 3: 4247.62 Resistance 2: 4127.49 Resistance 1: 4086.56 Pivot: 4007.36 Support 1: 3966.43 Support 2: 3887.23 Support 3: 3767.10 https://www.prorightline.com/rlch/030723SPX.jpg--ECONOMIC REPORTS AND EVENTS (all times are Eastern): WEDNESDAY, MARCH 8 8:15 am ADP employment 8:30 am U.S. trade balance 10:00 am Fed Chairman Powell testifies to House 10:00 am Job openings (JOLTS) 2:00 pm Beige Book THURSDAY, MARCH 9 8:30 am Jobless claims 10:00 am Fed Gov Waller speaks FRIDAY, MARCH 10 8:30 am Employment report 8:30 am U.S. unemployment rate 8:30 am Average hourly wages 8:30 am Average hourly wages 2:00 pm Federal budget 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/
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TRADER'S TIP:
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TRADER'S TIP: "Just When We Think It's Safe . . ." Remember that just when we start getting "too comfortable" with a stock's trend - be it up or down - it might be a good time to review the "other" side of the trade. For example, once we've identified a clear up trending pattern, and played it for a bounce a few times, that's precisely when we ought to start looking for a failure of support and an opportunity to short. Trends don't last forever, and we don't want to get lulled into a single-sided trading mentality. ***********************************
STOCKS COVERED IN THIS ISSUE
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COMMUNICATION SERVICES SECTOR Bilibili Inc. (BILI: Communication Services/Electronic Gaming & Multimedia) - 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 BILI. A move to the upside will trigger our BUY entry at 21.34, while a drop to 19.71 will trigger our SELL short entry. Follow your position with a 1.63 trailing stop. Tighten the stop to 0.82 once you have a 2.16 gain. BILI closed Tuesday at 20.55. Earnings Report Date: Jun 07, 2023. Beta: 1.07. Market-Cap: 7.869B. Optionable. ENERGY SECTOR Dril-Quip, Inc. (DRQ: Energy/Oil & Gas Equipment & Services) - BULLISH BOUNCE. This trader-friendly setup turns repetitive stock behavior into real profits. Based on the tendency for up-trending stocks to drop briefly and then resume the up-trend, the Bullish Bounce places traders into excellent stocks when conditions are primed for more skyward movement. DRQ's current price action near moving average support signals a potential BUY entry at 33.35, followed by a 2.58 trailing stop which can be tightened to 1.29 upon earning 2.36. DRQ closed Tuesday at 32.56. Earnings Report Date: Apr 26, 2023. Beta: 1.14. Market-Cap: 1.113B. Optionable. HEALTHCARE SECTOR Enliven Therapeutics, Inc. (ELVN: Healthcare/Biotechnology) - SQUEEZE PLAY. One interesting trait of price volatility is that it cycles back and forth through periods of expansion and contraction. Stocks that have recently seen their daily price range shift from an average or wide range to an extremely contracted state are ideal candidates for expansive price moves. In many cases the next move is relatively fast and covers a sizable amount of territory. To take advantage of these trades we use both a BUY and a SELL entry. This allows us to enter in whichever direction the breakout takes. In ELVN's case we will enter a BUY should it reach the 22.29 level, or a SELL short trade if it drops to 20.44. As usual a trailing stop is essential, 1.85 which should be tightened to 0.93 on a 0.7 gain. ELVN closed Tuesday at 21.19. Earnings Report Date: May 04, 2023. Beta: N/A. Market-Cap: 869.034M. Optionable. Corcept Therapeutics Incorporated (CORT: Healthcare/Biotechnology) - SQUEEZE PLAY. Trader indecision has put CORT 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 21.67 and a SELL short entry at 20.31. Now it's up to CORT to show us which entry will be filled. Once the trade is underway place a 1.36 trailing stop, which can be tightened to 0.68 after you achieve a 1.7 profit. CORT closed on Tuesday at 21.22. Earnings Report Date: May 03, 2023. Beta: 0.55. Market-Cap: 2.29B. Optionable. INDUSTRIALS SECTOR ZIM Integrated Shipping Services Ltd. (ZIM: Industrials/Marine Shipping) - BULLISH BOUNCE. ZIM has charted an upward weekly trend until recently when sellers showed up to push prices lower. On Tuesday the selling ran into solid support. A potential bounce up from this level should attract buyers and likely return ZIM to the previously established uptrend. The Bullish Bounce set-up is the basis for our BUY entry, so be ready to go long on a rise to our trigger at 22.15. Set a trailing stop of 1.67, tightening to 0.84 on a 2.38 profit. ZIM closed at 21.63 on Tuesday. Earnings Report Date: Mar 13, 2023. Beta: 2.01. Market-Cap: 2.597B. 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
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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!
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DISCLAIMER
The RightLine Report is an information service for investors and traders. It is not a solicitation nor a recommendation or offer to buy or sell securities. The information provided is obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. The publishers of The RightLine Report are not brokers or financial advisors, and are not acting in any way to influence the purchase or sale of any security. Stock picks, entry points and exit points should be considered an information resource to assist the trader in developing a trading plan and it is the sole responsibility of the reader to conduct his or her own due diligence before executing a trade. Trading securities should be considered speculative with a high degree of volatility and risk. The publishers of The RightLine Report recommend that anyone trading securities should do so with caution, exercise prudent trading discipline and have a personal risk management strategy in place before doing so. It is possible at this or some subsequent date, the publishers and staff of The Pro Right Line Corp. may own, buy or sell securities presented. The Pro Right Line Corp. is not a financial advisory service. Its publishers, owners or investors, are not liable for any losses or damages, monetary or otherwise, that result from the content of The RightLine Report. Past RightLine Report performance may not be indicative of future performance. All subscriptions and/or use of the RightLine.net website are subject to RightLine's "Terms of Use" and "Subscriber Terms & Conditions" which are posted at www.rightline.net. Any REDISTRIBUTION of the above information, without The RightLine's written consent, is STRICTLY PROHIBITED. Copyright / The Pro Right Line Corporation - All Rights Reserved To Unsubscribe, send an email to cs@prorightline.com or call 1-312-248-4241. |