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May 14, 2024 - The RightLine Report
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NOTES FROM THE EDITOR
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Rallies And Trading Volume
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"QUICK LIST"
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Stock 05/14 05/14 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
------ -------- -------- -------- -------- --------------- --------
THRY 22.82 0.39 23.6 22.02 1.58/0.79 1.56
ARLP 22.55 0.28 22.85 1.44/0.72 0.98
CRBG 29.94 0.93 30.38 2.45/1.23 1.22
BAND 21.85 -0.16 22.61 21.16 1.45/0.73 1.22
ACMR 23.16 0.14 23.9 22.32 1.58/0.79 3.74
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 closed mostly higher on Tuesday as investors absorbed the latest US inflation figures. The S&P 500 saw a gain of 0.5%, while the NASDAQ, known for its technology focus, rose by over 0.7%. Notably, small-cap stocks performed exceptionally well, with the Russell 2000 index closing higher by over 1%. This surge in small-cap stocks, up more than 6% since mid-April, signals a resurgence in investor risk appetite, fueled partly by a decline in bond yields. Although the producer price index (PPI) inflation for April surpassed expectations, much of the surprise stemmed from downward revisions to March data. Consequently, markets largely shrugged off the inflation uptick, with stocks trending higher and bond yields moving lower. Within the S&P 500, growth sectors like information technology and communication services led the charge. Overseas, European markets showed mixed performance following positive news on German economic sentiment, which reached its highest level since 2022. Inflation will continue to command attention, with the release of consumer price index (CPI) data on Wednesday. The robust growth in corporate profits has been a driving force behind the recent strength in equity markets. With over 90% of S&P 500 companies having reported first-quarter earnings, roughly 80% have exceeded expectations, with earnings expected to grow by over 5% year-over-year. Sectors like information technology, consumer discretionary, and communication services stand out with earnings growth projections exceeding 20% for the first quarter. Even defensive sectors like utilities, consumer staples, and financials have shown strong profit growth. Looking ahead to the full year, expectations are for the S&P 500 to achieve nearly 11% year-over-year earnings growth. Given the current valuation landscape, strong profit growth is likely to be a crucial factor in sustaining equity market strength throughout the remainder of the year. May 13, 2024 May 14, 2024
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Dow 39,431.51 -81.33 39,558.11 126.60
Nasdaq 16,388.24 47.37 16,511.18 122.94
S&P 500 5,221.42 -1.26 5,246.68 25.26
NYSE Volume 4.29B 4.78B
NYSE Advancers 1,460 1,874
NYSE Decliners 1,326 938
Nasdaq Volume 4.47B 7.3B
Nasdaq Advancers 2,222 2,731
Nasdaq Decliners 1,962 1,488
New Highs/Lows
05/07 05/08 05/09 05/10 05/13 05/14
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NYSE New Highs 75 139 192 216 153 157
NYSE New Lows 212 32 18 24 18 14
Nasdaq New Highs 159 98 158 169 142 162
Nasdaq New Lows 70 84 93 100 89 77
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TRADER'S TIP:
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TRADER'S TIP: "Husband and Wife" It's okay to fall in love with a stock, but never marry it. Keeping an objective view of a trade is essential if you want to be able to exit without 'psychological' hang-ups. Do not become overly committed to a stock - the cost can be way too high. **************************
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/ https://www.prorightline.com/rlch/051424SPX.jpg--ECONOMIC REPORTS AND EVENTS (all times are Eastern): MONDAY, MAY 13 9:00 am Fed Vice Chair Philip Jefferson and Cleveland Fed President Loretta Mester TUESDAY, MAY 14 8:30 am Producer price index 8:30 am PPI year over year 8:30 am Core PPI 8:30 am Core PPI year over year 9:10 am Fed Gov Lisa Cook speaks 10:00 am Fed Chair Jerome Powell speaks WEDNESDAY, MAY 15 8:30 am Consumer price index 8:30 am CPI year over year 8:30 am Core CPI 8:30 am Core CPI year over year 8:30 am U.S. retail sales 8:30 am Retail sales minus autos 8:30 am Empire State manufacturing survey 10:00 am Home builder confidence index 10:00 am Business inventories March 12:00 pm Minneapolis Fed President Neel Kashkari speaks 3:20 pm Fed Gov. Michelle Bowman speaks THURSDAY, MAY 16 8:30 am Initial jobless claims 8:30 am Philadelphia Fed manufacturing survey 8:30 am Housing starts 8:30 am Building permits 8:30 am Import price index 8:30 am Import price index minus fuel 9:15 am Industrial production 9:15 am Capacity utilization 1:00 pm New York Fed President Williams speaks 10:00 am Fed Vice Chair for Supervision Michael Barr testifies 12:00 pm Cleveland Fed President Loretta Mester speaks 3:50 pm Atlanta Fed President Raphael Bostic speaks FRIDAY, MAY 17 10:00 am U.S. leading economic indicators 10:15 am Fed Governor Christopher Waller speaks 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: "Looking for a Good Fortune Teller?" You don't really need a psychic if you plan each position with a "what if" approach. Before entering any trade always ask - "What will I do if price moves in my favor, and what will I do if it moves against me?" Since most traders and investors never consider these questions at all, simply writing down specific answers will put you WAY ahead of the game. Remember to set any bias aside, and play the hand that's dealt. ***********************************
STOCKS COVERED IN THIS ISSUE
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COMMUNICATION SERVICES SECTOR Thryv Holdings, Inc. (THRY: Communication Services/Internet Content & Information) - SQUEEZE PLAY. Tuesday's trading action forced THRY'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 THRY 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 23.6 if THRY moves higher, and place your order to SELL short at 22.02 if price declines to that level. As usual follow your entry with a trailing stop, 1.58 should be sufficient. Reduce your stop to 0.79 on a 1.56 gain. THRY closed Tuesday at 22.82. Earnings Report Date: Aug 1, 2024. Beta: 0.97. Market-Cap: 817.659M. Optionable. ENERGY SECTOR Alliance Resource Partners, L.P. (ARLP: 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 ARLP which met our setup criteria on Tuesday. The BUY trigger for this trade is at 22.85, and the trailing stop is sized at 1.44. Resize the stop to 0.72 upon collecting a 0.98 point gain. ARLP closed Tuesday at 22.55. Earnings Report Date: Jul 29, 2024. Beta: 1.15. Market-Cap: 2.888B. Optionable. FINANCIAL SERVICES SECTOR Corebridge Financial, Inc. (CRBG: Financial Services/Asset Management) - 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. CRBG's behavior on Tuesday could very well be a sign that a new bounce is underway. Place a BUY trigger at 30.38. In the event your trigger is met, also place a 2.45 trailing stop which can be trimmed down to 1.23 when you have a 1.22 profit. CRBG closed Tuesday at 29.94. Earnings Report Date: Aug 2, 2024. Beta: --. Market-Cap: 18.313B. Optionable. TECHNOLOGY SECTOR Bandwidth Inc. (BAND: Technology/Software - Infrastructure) - SQUEEZE PLAY. A look at BAND'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 22.61 and a SELL short trigger at 21.16. Once BAND shows which way it's headed, place your triggered entry order. As soon as your order is filled, follow with a trailing stop of 1.45 and tighten to 0.73 on a 1.22 gain. BAND closed Tuesday at 21.85. Earnings Report Date: Jul 31, 2024. Beta: 1.44. Market-Cap: 590.118M. Optionable. ACM Research, Inc. (ACMR: Technology/Semiconductor Equipment & Materials) - SQUEEZE PLAY. ACMR is caught in a dilemma. The stock's compressed price range on Tuesday has resulted in a condition comparable to a wound up rubber band. We anticipate that this undecided equity will take off soon, but with the direction still in question we'll let upcoming market action tell us whether to buy shares or sell short. ACMR is now at 23.16. We can capture price action either way by placing a BUY trigger at 23.9 and a SELL short trigger at 22.32. Once ACMR reveals its direction, enter your triggered order and disregard the other one. As soon as your position is in place, follow up with a trailing stop of 1.58. When you acquire a 3.74 profit, tighten the stop to 0.79. Earnings Report Date: Aug 2, 2024. Beta: 1.41. Market-Cap: 1.436B. 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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