May 12, 2022 - The RightLine Report
Notes From The Editor
"Trading Objectively"
One of the most important skills a stock trader can acquire is the ability to be objective while trading. By "objective" I simply mean viewing our trades and the market without any distortion caused by personal expectations. As easy as this may sound at first, it takes persistence to reach a level of objectivity that allows us to see things as they are instead of how we want them to be.
Here's the main reason that it's so important. Our expectations and desires for positive price movement act as a powerful force on our perception. This force can dramatically influence how we interpret the information we use to manage our stock positions.
Many traders tend to avoid or ignore any information that doesn't conform to the desired outcome of a trade. In other words, they usually prefer to limit the possibilities to whatever results they would like to see. While this approach can produce pleasant feelings in the early stages of a trade, it inevitably leads to painful incidents of forced awareness.
By being objective we don't have to make a commitment to any specific outcome. This gives us a more reasonable way to interpret information and determine probable results. As the trade progresses, we simply accept the flow of information without prejudice.
Trading objectively let's you acknowledge what is happening and respond with planned actions. It dissolves fear. You can even observe your trades as if you weren't even in them. You no longer have to focus on the outcome; you can focus on following your method.
Being objective increases your field of vision and lets you take on new positions without the common blind spots created by emotionally charged expectations. This level of clarity enables you select trade setups with higher probabilities, then execute and manage them with a higher degree of success.
Trade well!
- Thomas Sutton, Editor
Stocks Covered Today Stock Splits
Quick List
Stock 05/12 05/12 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
------ -------- -------- -------- -------- --------------- --------
CC 37.92 -0.50 38.98 3.29/1.65 2.36
MAT 25.21 0.51 25.69 2.08/1.04 1.54
BXC 85.54 1.87 89.06 10.74/5.37 8.44
WIRE 124.68 2.80 126.48 10.19/5.1 8.28
HUBG 74.04 0.86 75.13 5.99/3 4.08
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.
Stocks Covered Today Stock Splits
Market Summary
The US stock indices were mixed on Thursday as the Dow and S&P 500 closed lower, while the Nasdaq inched higher. In economic news, an inflation report showed wholesale prices are still on the rise, initial unemployment claims were higher, yet continuing claims dropped to a new low. Equities featured mixed quarterly earning results and cautious guidance from Walt Disney (DIS $104), as Tapestry (TPR $31) beat profit expectations on strong North American sales. The USD/dollar and oil prices were higher, gold was lower and treasuris moved up to put downward pressure on yields.
May 11, 2022 May 12, 2022
-------------------- --------------------
Dow 31,834.11 -326.63 31,730.30 -103.81
Nasdaq 11,364.24 -373.44 11,370.96 6.73
S&P 500 3,935.18 -65.87 3,930.08 -5.10
NYSE Volume 5.85B 6.31B
NYSE Advancers 1,032 1,714
NYSE Decliners 2,372 1,679
Nasdaq Volume 6.15B 6.67B
Nasdaq Advancers 1,036 2,653
Nasdaq Decliners 3,872 2,219
New Highs/Lows
05/05 05/06 05/09 05/10 05/11 05/12
--------------------------------------------
NYSE New Highs 53 28 12 5 13 4
NYSE New Lows 379 616 1,063 911 784 1,044
Nasdaq New Highs 21 24 23 22 16 11
Nasdaq New Lows 645 1,098 1,711 1,381 1,574 1,706
Stocks Covered Today Stock Splits
TRADER'S TIP: "Trading vs. Gambling"
The biggest difference between trading and gambling is that gamblers focus more attention on favorable outcomes while traders focus more attention on losing outcomes. As a result, gamblers end up losing big while traders avoid it.
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 - 3930.08 May 12, 2022
52-Week High: 4818.62
52-Week Low: 3858.87
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
NASDAQ Composite - 11370.96 May 12, 2022
52-Week High: 16212.23
52-Week Low: 11108.76
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 - 31730.30 May 12, 2022
52-Week High: 36952.65
52-Week Low: 31228.22
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
Stocks Covered Today Stock Splits
Market Calendar
ECONOMIC REPORTS AND EVENTS (all times are Eastern): Monday, May 16, 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 17, 2022: 10-May 6 am NFIB small-business index 10-May 11 am Real household debt (SAAR) Wednesday, May 18, 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
Stocks Covered Today Stock Splits
TRADER'S TIP: "A Unique Way To Trade"
Instead of trying to predict when the next big market move will take place, a trader's job is to minimize losses and drawdown while waiting for the big winning trades to show up. This unique way of looking at trading focuses on managing risk and cash flow rather than searching for magical indicators and predicting market moves. The only way to guarantee that you catch the big moves is to always be in the market.
Stocks Covered in This Issue
BASIC MATERIALS SECTOR
The Chemours Company (CC: Basic Materials/Specialty Chemicals) - BULLISH BOUNCE. CC has charted an upward weekly trend until recently when sellers showed up to push prices lower. On Thursday the selling ran into solid support. A potential bounce up from this level should attract buyers and likely return CC 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 38.98. Set a trailing stop of 3.29, tightening to 1.65 on a 2.36 profit. CC closed at 37.92 on Thursday. Earnings Report Date: Jul 27, 2022. Beta: 2.00. Market-Cap: 5.895B. Optionable.
CONSUMER CYCLICAL SECTOR
Mattel, Inc. (MAT: Consumer Cyclical/Leisure) - BULLISH BOUNCE. If you are looking for another bouncer with profits in mind, MAT fits the bill. Shares have been in retreat-mode lately, but now this stock is in the process of bouncing from support. Currently priced at 25.21, plan to buy shares at 25.69 and use a 2.08 trailing stop. Tighten the stop to 1.04 on a 1.54 gain. Earnings Report Date: Jul 25, 2022. Beta: 1.44. Market-Cap: 8.886B. Optionable.
INDUSTRIALS SECTOR
BlueLinx Holdings Inc. (BXC: Industrials/Building Products & Equipment) - 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. BXC's current price action near moving average support signals a potential BUY entry at 89.06, followed by a 10.74 trailing stop which can be tightened to 5.37 upon earning 8.44. BXC closed Thursday at 85.54. Earnings Report Date: Aug 01, 2022. Beta: 1.82. Market-Cap: 826.142M. Optionable.
Encore Wire Corporation (WIRE: Industrials/Electrical Equipment & Parts) - BULLISH BOUNCE. Among other strengths, the Bullish Bounce protects traders from buying a stock "at the top" of its current cycle. The entry into this setup always takes place in upward-moving stocks that have retreated a bit under normal conditions. Now sitting at 124.68, WIRE is on our radar for a BUY entry at 126.48. If you purchase shares of WIRE, be sure to also place a trailing stop of 10.19. Snug it up to 5.1 on a 8.28 gain. Earnings Report Date: Jul 25, 2022. Beta: 1.17. Market-Cap: 2.46B. Optionable.
Hub Group, Inc. (HUBG: Industrials/Integrated Freight & Logistics) - 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. HUBG's reaction to support on Thursday created a Bullish Bounce setup with a BUY entry trigger at 75.13. Use a 5.99 trailing stop, which should work well with HUBG's typical daily range. Tighten it to 3 on a 4.08 profit. HUBG closed at 74.04 on Thursday. Earnings Report Date: Jul 27, 2022. Beta: 0.90. Market-Cap: 2.566B. 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.
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
Click Here To Unsubscribe