May 10, 2022 - The RightLine Report 

 
               **********************************
                      NOTES FROM THE EDITOR
               **********************************

A RightLine Report subscriber asks for clarification about holding both long and short entries in the same stock ...
"I like your inputs and technical analysis. In one of your reports you mentioned that some people trade the market both ways. What I understood is that they go long and short at the same time, two accounts, I assume. Can you lead me more into a better understanding of this technique of trading? Thanks!"

Trading "both ways" in the same security - long and short - is usually done at different times. For example, you might enter a long trade in the SPY on a bounce from support. When the price rises to a known level of resistance, exit, take your profits and reverse the SPY trade to a short for the expected move downward. This is the most common way of trading "both ways," though not at the same time.

A way to trade both ways at the same time is to have one long position in a stock that is trending higher, and a short position in a different stock that is trending lower. This allows you to take advantage of strong trends in different stocks - even when the trends are counter to each other.

There are even occasions when it is wise to trade the same stock or market in both directions at the same time. Though it may seem contradictory at first, it is sometimes a good strategy to hold two opposing positions in the same stock at the same time - but NOT the same time frame.

For example, you might have a long-term position in SPY held an IRA or 401-k retirement account that you manage using weekly charts. We refer to this position as being in a "weekly time frame." At the same "time" you may hold another position in SPY, only this one is intended to take advantage of a short-term decline expected to occur over the next few days.

We would refer to this second position as being in a "daily time frame." You may hold your weekly time frame position for several months or even years, while the daily trade is normally held for less than a couple of weeks.

Bottom line: There is a huge difference between the "same time" and the "same time frame." Holding opposing positions in the same stock in the same time frame is at best a breakeven proposition. Actually, it's never as good as break even, because you have to deduct brokerage fees and related costs.

On the other hand, it is often a good strategy to hold both long and short positions in the same stock in different time frames. Just be sure that you fully understand the difference between "time" and "time frame" before you do it.

Trade Well!

~Thomas Sutton, Editor 

                ***********************************
                           "QUICK LIST"
                ***********************************

Stock     05/10     05/10      Buy      Short   Trailing Stops     Gain 
Symbol    Price      +/-      Entry     Entry   Initial/Tighten   Amount 
------  --------  --------  --------  --------  ---------------  --------

HTHT      25.87      0.51     27.21     24.85        2.36/1.18      3.58
SFM       25.66      0.75     26.03     24.33         1.7/0.85      2.18
IRMD      31.42      1.26     32.39     29.69         2.7/1.35       4.1
IESC      28.27      1.39     28.84     26.28        2.56/1.28       2.2
FRGE      25.13      1.54     26.72                  5.37/2.69      6.86


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
                   *****************************

The major US stock indices were lower on Tuesday as traders contemplated several challenges including tightening of monetary policy by the Fed Bank, increasingly higher inflation, and the potential for slower economic growth. In equites news, Pfizer (PFE $49) has agreed to acquire migraine therapy maker Biohaven Pharmaceutical Holding Company (BHVN $140) for $148.50 per share in cash, while the share price of Peloton Interactive (PFE $49) dropped after the company reported posting a deeper quarterly loss than expected and warned that it is under capitalized. Gold and oil prices moved lower, the USD/dollar and treasuries finished higher.


                       May 9, 2022            May 10, 2022   
                  --------------------   --------------------
Dow                 32,245.70  -653.67     32,160.74   -84.96
Nasdaq              11,623.25  -521.41     11,737.67   114.42
S&P 500              3,991.24  -132.10      4,001.05     9.81

NYSE Volume                      5.99B                  5.97B
NYSE Advancers                     407                  1,413
NYSE Decliners                   3,034                  1,957

Nasdaq Volume                    5.93B                  6.28B
Nasdaq Advancers                   758                  2,088
Nasdaq Decliners                 4,177                  2,800

                                 New Highs/Lows

                   05/03  05/04  05/05  05/06  05/09  05/10
                 --------------------------------------------
NYSE New Highs        27     53     53     28     12      5
NYSE New Lows        279    332    379    616  1,063    911
Nasdaq New Highs      37     40     21     24     23     22
Nasdaq New Lows      288    501    645  1,098  1,711  1,381

                   *********************************** 
                              TRADER'S TIP:  
                   ***********************************

TRADER'S TIP: "Beyond a Reasonable Doubt"

It's impossible to predict with 100% accuracy, which trades will be successful and which won't. There are always doubts - even the best setups will present conflicting possible outcomes as you access the odds. Don't let this deter you. Use the RightLine Risk Control Calculator to determine a reasonable amount to risk, and then enter the position. If the trade doesn't go in your favor your proper position sizing and stop placement contain the damage. Remember that you have to put money in the market to win. Just do it . . . Wisely! You can check out the RightLine Risk Control Calculator at http://www.rightline.net/home/gate_rm.html 
                      **************************
                         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/ 
S&P 500 - 4001.05 May 10, 2022

52-Week High: 4818.62
52-Week Low: 3958.17
Daily Trend: DOWN
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 4654.80
Resistance 2: 4409.65
Resistance 1: 4266.49
Pivot: 4164.50
Support 1: 4021.34
Support 2: 3919.35
Support 3: 3674.20
https://www.prorightline.com/rlch/051022SPX.jpg

NASDAQ Composite - 11737.67 May 10, 2022

52-Week High: 16212.23
52-Week Low: 11566.28
Daily Trend: DOWN
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 14362.99
Resistance 2: 13368.13
Resistance 1: 12756.39
Pivot: 12373.27
Support 1: 11761.53
Support 2: 11378.41
Support 3: 10383.55


Dow Industrials - 32160.74 May 10, 2022

52-Week High: 36952.65
52-Week Low: 31887.89
Daily Trend: DOWN
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 36491.40
Resistance 2: 34823.53
Resistance 1: 33861.45
Pivot: 33155.66
Support 1: 32193.58
Support 2: 31487.79
Support 3: 29819.92


                       **************************
                             MARKET CALENDAR
                       **************************
--ECONOMIC REPORTS AND EVENTS (all times are Eastern): 
Monday, May 09, 2022:
09-May  10 am   Wholesale inventories (revision)
09-May  11 am   Consumer 1-year inflation expecations
09-May  11 am   Consumer 3-year inflation expecations

Tuesday, May 10, 2022:
10-May   6 am   NFIB small-business index
10-May  11 am   Real household debt (SAAR)

Wednesday, May 11, 2022:
11-May  8:30 am   Consumer price index
11-May  8:30 am   Core CPI
11-May  8:30 am   CPI (year-over-year)
11-May  8:30 am   Core CPI (year-over-year)
11-May   2 pm   Federal budget

Thursday, May 12, 2022:
12-May  8:30 am   Initial jobless claims
12-May  8:30 am   Continuing jobless claims
12-May  8:30 am   Producer price index (final demand)

Friday, May 13, 2022:
13-May  8:30 am   Import price index
13-May  10 am   UMich consumer sentiment index (preliminary)
13-May  10 am   UMich 5-year inflation expectations

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: "Closing Shop For The Holidays"

Keep a close watch on trading conditions when a market holiday approaches. Professional traders will often leave early for an extra day away from the office, and many will close positions to avoid holding over a long holiday weekend. Volume is typically light and once institutional money managers are away, small traders can often push a few stocks around increasing volatility substantially. Always make sure you have a reliable risk control system in place. 

                   ***********************************
                      STOCKS COVERED IN THIS ISSUE    
                   ***********************************

CONSUMER CYCLICAL SECTOR

Huazhu Group Limited (HTHT: Consumer Cyclical/Lodging) - SQUEEZE PLAY. Tuesday's narrow price range has created a potentially profitable setup in HTHT, as sellers and buyers find themselves in a near tie for control of price direction. The next short-term trend could go either way, so prepare for a move out of the draw within the next day or so. Set a BUY entry at 27.21 and a SELL short entry at 24.85. Let HTHT's price action determine your long or short entry. Once the order is filled, place a 2.36 trailing stop, and tighten it to 1.18 upon getting a 3.58 gain. HTHT closed Tuesday at 25.87. Earnings Report Date: May 23, 2022. Beta: 1.34. Market-Cap: 9.577B. Optionable.

CONSUMER DEFENSIVE SECTOR

Sprouts Farmers Market, Inc. (SFM: Consumer Defensive/Grocery Stores) - SQUEEZE PLAY. Traders are feeling the pressure as SFM's intra-day price range on Tuesday shrunk to the narrowest spread in over a week. The tension between buyers and sellers should provide enough pent-up engergy for a breakout move in the days ahead, so get ready to trade with the new trend. To achieve that, place a BUY entry at 26.03 and a SELL short entry at 24.33. SFM's price movement will decide which entry is filled. As soon as you're in the trade, enter a 1.7 trailing stop. Tighten it to 0.85 after you get a 2.18 gain. SFM closed Tuesday at 25.66. Earnings Report Date: Aug 03, 2022. Beta: 0.34. Market-Cap: 2.813B. Optionable.

HEALTHCARE SECTOR

IRadimed Corporation (IRMD: Healthcare/Medical Devices) - SQUEEZE PLAY. Tuesday's trading action forced IRMD'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 IRMD 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 32.39 if IRMD moves higher, and place your order to SELL short at 29.69 if price declines to that level. As usual follow your entry with a trailing stop, 2.7 should be sufficient. Reduce your stop to 1.35 on a 4.1 gain. IRMD closed Tuesday at 31.42. Earnings Report Date: Jul 28, 2022. Beta: 0.82. Market-Cap: 394.66M. Not Optionable.

INDUSTRIALS SECTOR

IES Holdings, Inc. (IESC: Industrials/Engineering & Construction) - SQUEEZE PLAY. A look at IESC'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 28.84 and a SELL short trigger at 26.28. Once IESC shows which way it's headed, place your triggered entry order. As soon as your order is filled, follow with a trailing stop of 2.56 and tighten to 1.28 on a 2.2 gain. IESC closed Tuesday at 28.27. Earnings Report Date: Aug 03, 2022. Beta: 1.24. Market-Cap: 587.674M. Not Optionable.

TECHNOLOGY SECTOR

Forge Global Holdings, Inc. (FRGE: Technology/Software-Application) - BULLISH BOUNCE. Up-trending stocks like FRGE have a tendency to bounce their way skyward rather than travel higher in a straight line. After touching down to a moving average support level on Tuesday, FRGE is poised to lift off again. To take advantage of this setup, prepare to BUY shares at 26.72 if positive price action occurs. As always, follow your entry with a trailing stop. A 5.37 trailer should work well with FRGE. Tighten it to 2.69 on a 6.86 gainer. Earnings Report Date: N/A. Beta: N/A. Market-Cap: 4.174B. 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  
---------------- -------     --------    -------     ------  -------   
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

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. 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 800-737-4518.