May 2, 2024 - The RightLine Report
Notes From The Editor
Very few people who set out to get rich quick in the stock market actually do it. The small group of get-rich-quickers who do make lots of money fast do it purely as a result of chance. They rarely keep their gains for very long.
This is because trying to get rich quick causes people to take on way too much risk. This is normally done by using excessive margin or by investing too much money in one position. Unfortunately, people who are in a hurry to make a lot of money tend not to do a good job of managing risk.
Managing risk involves focusing more on the potential downside of a trade or investment than the potential upside. In practical terms this means using an objective method to limit drawdowns in the value of your stock portfolio.
If you carefully manage risk you will almost certainly make money over the long-term. Those who consistently ignore risk and overload the wagons in an attempt to get rich quick are guaranteed failure.
For example, most traders with a get-rich-quick mindset don't realize that if they repeatedly bet everything on trades in which the probability of success is 90% they will eventually lose everything. Sure, they look like a genius for a while, but the one out of every ten trades that happens to be a 'loser' will wipe them out.
Trading is a type of speculation where education and skill can dramatically improve your odds of winning. Risk management is a skill. Reducing your risk increases the odds that you will win.
Stay focused on what you need to know and what you need to do. Remember that money is just a by-product of wise action.
Trade well,
Thomas Sutton, Editor
Stocks Covered Today Stock Splits
Quick List
Stock 05/02 05/02 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
------ -------- -------- -------- -------- --------------- --------
CPNG 22.50 0.29 22.99 1.83/0.92 2.02
STEP 36.53 1.04 37.31 3.09/1.55 1.56
EQT 39.48 0.82 40.19 2.56/1.28 1.55
AVTE 20.75 -0.09 21.49 19.6 1.89/0.95 1.88
ATNI 21.03 0.87 21.46 19.79 1.67/0.84 2.10
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
Stocks rebounded on Thursday, regaining some ground after a turbulent Wednesday, as investors digested the implications of the latest Federal Reserve policy meeting. The uptick in equities, coupled with a decline in interest rates, suggests a cautious optimism that the Fed will refrain from tightening monetary policy further in response to recent firm inflation data.
Thursday's market tone indicates a sense of comfort with expectations for sustained healthy employment conditions, especially ahead of the upcoming jobs report. Technology, consumer discretionary, real estate, and small-cap stocks led the rally, signaling a resurgence in risk appetite and a more positive outlook on the economic cycle. Meanwhile, gold and oil prices remained stable, and global equities showed mixed performance for the session.
As the week's focal point shifts from the Fed meeting to the labor market, all eyes are on the April employment report scheduled for release on Friday morning. With interest rates climbing in recent weeks due to subdued inflation readings, investors are closely monitoring labor market indicators for signs of continued economic resilience.
Despite some market volatility, equities have held up relatively well, hovering near all-time highs, supported by ongoing economic strength. Market consensus anticipates approximately 230,000 new jobs and a steady unemployment rate for April. Of particular interest is the trend in wage growth, as it provides insights into the balance between job creation and inflationary pressures, crucial for sustaining consumer spending and alleviating concerns about rising prices.
May 1, 2024 May 2, 2024
-------------------- --------------------
Dow 37903.29 87.37 38225.66 322.37
Nasdaq 15605.48 -52.34 15840.96 235.4
S&P 500 5018.39 -17.30 5064.20 45.81
NYSE Volume 4.54B 4.38B
NYSE Advancers 1,700 2,189
NYSE Decliners 1,102 603
Nasdaq Volume 5.27B 4.9B
Nasdaq Advancers 2,499 2,915
Nasdaq Decliners 1,664 1,269
New Highs/Lows
04/25 04/26 04/29 04/30 05/01 05/02
--------------------------------------------
NYSE New Highs 44 79 79 64 56 80
NYSE New Lows 48 22 9 36 36 26
Nasdaq New Highs 40 58 86 56 63 81
Nasdaq New Lows 206 92 71 123 113 101
Stocks Covered Today Stock Splits
TRADER'S TIP: "Efficient Execution"
How well do you execute your trading plan? You can judge your effectiveness by how skillfully you move in and out of the market each time you act on an entry or exit signal. Preparation and practice is necessary to avoid delays or mistakes at the point of action. It is helpful to write down the exact required steps in advance, so you will know exactly what to do before you need to do it.
When the time arrives, don't wait; always be decisive. Keep records of your results so you can correct any glitches that may arise. This disciplined approach keeps you focused on a repetitive process to prevent execution errors and produce favorable results over time.
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".
Stocks Covered Today Stock Splits
Market Calendar
ECONOMIC REPORTS AND EVENTS (all times are Eastern): MONDAY, APRIL 29 None scheduled TUESDAY, APRIL 30 8:30 am Employment cost index 9:00 am S&P Case-Shiller home price index 9:45 am Chicago Business Barometer (PMI) 10:00 am Consumer confidence WEDNESDAY, MAY 1 8:15 am ADP employment 10:00 am Construction spending 10:00 am ISM manufacturing 10:00 am Job openings 2:00 pm FOMC interest-rate decision 2:30 pm Fed Chair Powell press conference 5:30 pm Auto sales THURSDAY, MAY 2 8:30 am Initial jobless claims 8:30 am U.S. trade deficit 8:30 am U.S. productivity 8:30 am U.S. unit-labor costs 10:00 am Factory orders FRIDAY, MAY 3 8:30 am U.S. employment report 8:30 am U.S. unemployment rate 8:30 am U.S. hourly wages 8:30 am Hourly wages year over year 10:00 am ISM services 7:45 pm Chicago Fed President Austan Goolsbee speech 8:15 pm New York Fed President John Williams speech 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: "Fire Drill"
At some time or another, every online trader will experience a "technical problem." Computers, Internet Service Providers, charting tools, data feeds, broker access - even the phone and electrical power can break down temporarily. These interruptions are inevitable, so you might as well plan for them.
Arrange a backup for every aspect of your trading process, then conduct a "fire drill" so you will know exactly what to do when the real disruptions come. You'll certainly be glad you did!
Stocks Covered in This Issue
N/A SECTOR
Coupang, Inc. (CPNG) - 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 CPNG which met our setup criteria on Thursday. The BUY trigger for this trade is at 22.99, and the trailing stop is sized at 1.83. Resize the stop to 0.92 upon collecting a 2.02 point gain. CPNG closed Thursday at 22.50. Earnings Report Date: May 7, 2024. Beta: 1.32. Market-Cap: 40.214B. Not Optionable.
StepStone Group LP (STEP) - 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. STEP's behavior on Thursday could very well be a sign that a new bounce is underway. Place a BUY trigger at 37.31. In the event your trigger is met, also place a 3.09 trailing stop which can be trimmed down to 1.55 when you have a 1.56 profit. STEP closed Thursday at 36.53. Earnings Report Date: May 22, 2024. Beta: 1.25. Market-Cap: 4.184B. Not Optionable.
EQT Corporation (EQT) - BULLISH BOUNCE. Another bullish bouncer, EQT appears ready to resume trading in an uptrend after recent selling forced the stock lower for several days. Thursday's positive price action near Moving Average support says it's time to BUY shares if EQT reaches our entry trigger set at 40.19. Also place a 2.56 trailing stop which can be narrowed to 1.28 when you reach a 1.55 profit. EQT closed Thursday at 39.48. Earnings Report Date: Jul 23, 2024. Beta: 1.14. Market-Cap: 17.434B. Not Optionable.
Aerovate Therapeutics, Inc. (AVTE) - SQUEEZE PLAY. Thursday's trading action forced AVTE'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 AVTE 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 21.49 if AVTE moves higher, and place your order to SELL short at 19.6 if price declines to that level. As usual follow your entry with a trailing stop, 1.89 should be sufficient. Reduce your stop to 0.95 on a 1.88 gain. AVTE closed Thursday at 20.75. Earnings Report Date: May 13, 2024. Beta: 1.23. Market-Cap: 596.301M. Not Optionable.
ATN International, Inc. (ATNI) - SQUEEZE PLAY. ATNI is caught in a dilemma. The stock's compressed price range on Thursday 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. ATNI is now at 21.03. We can capture price action either way by placing a BUY trigger at 21.46 and a SELL short trigger at 19.79. Once ATNI 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 1.67. When you acquire a 2.10 profit, tighten the stop to 0.84. Earnings Report Date: Jul 24, 2024. Beta: 0.38. Market-Cap: 324.998M. Not 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
---------------- ------- -------- ------- ------ -------
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.
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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