May 30, 2023 - The RightLine Report
Notes From The Editor
I once saw a dangerous bit of advice posted on a sports wagering website ... "If you bet $100 on a game and lose, you double the next wager to $200, which recovers the previous loss and also gives you a profit, IF you win. If you lose, the doubling up process is put into play so that as often as you lose, when that win does occur, you're guaranteed to win back all prior bets, plus a profit on the amount of your first bet."
How about that? Sounds like a surefire way to make money betting on sporting events. All you have to do is double your bet after every loss so that when you DO win, you'll get it all back PLUS the payoff for the original bet. There's no way to lose in the long run ... Right?
The approach described above is typically referred to as a Martingale System, one of the oldest betting methods around. It was originally developed for gambling at the roulette table and other games of chance, yet traders sometimes try to use the same system in the stock market. Here's a quick look at how this might work
Let's say you are willing to put $3000 into a trade, risking $300. If you win, you take a $300 profit and place another trade. If you lose, you double the amount of dollars in the next trade, so you have $6000 in the position and $600 at risk. If you win, you take a $600 profit. If you lose, you double the next trade - put $12,000 into the new position and risk $1,200. And on it goes.
You're okay as long as you don't run into a string of losses that requires you to double up to an amount larger than your account size. However, it's only a matter of time until that very thing will happen. Unfortunately, a string of ten losers requires $3.7-Million for the next trade. You'll need around $100-Million to meet fifteen losers in a row, and a cool $3.15-Billion for twenty.
The good news? Eventually the Martingale System will win - IF you have an unlimited amount of cash and time. This is because no matter how big the string of losers becomes, a winning trade will eventually recover the losses.
The most important thing to know about this system is that the amount required for each trade skyrockets during a losing run. Those who don't have at least a few hundred million dollars to risk will soon go broke. As a result, only someone with unlimited capital can use this method successfully. For everyone else, the Martingale System is a fast track to financial ruin.
Trade well!
Thomas Sutton, Editor
Note: To learn about Risk Management techniques for successful traders check out the RightLine Risk Control System at https://prorightline.com/index.php/rightline-risk-control-system/.
Stocks Covered Today Stock Splits
Quick List
Stock 05/30 05/30 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
------ -------- -------- -------- -------- --------------- --------
FL 26.03 -0.24 26.88 24.89 1.99/1 2.58
WSBC 24.46 0.01 24.85 23.27 1.58/0.79 2.58
CUBI 24.64 -0.04 25.26 23.07 2.19/1.1 3.14
PLRX 21.30 -0.20 22.24 20.5 1.74/0.87 3.04
PKST 23.35 -0.93 24.82 22.34 2.48/1.24 5.1
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
Following an initial surge of optimism, market enthusiasm waned on Tuesday, resulting in a lower finish for the S&P 500. The cause of this shift was news of a tentative agreement on the debt limit reached in Washington. With a relatively light calendar, investors remained focused on key factors shaping the overall market landscape. This includes moderating inflation, the Federal Reserve's future actions, and a slowing economy. Global equities and commodities displayed mixed performance, with gold prices edging higher and oil prices declining. Interest rates experienced a decrease, as the 10-year Treasury yield returned to approximately 3.7%. Within the market, the technology sector played a leading role during the holiday-shortened week, building on the previous week's rally that has resulted in a year-to-date increase of over 30% for tech stocks.
May 29, 2023 May 30, 2023
-------------------- --------------------
Dow Closed 0 33,042.78 -50.56
Nasdaq Closed 0 13,017.43 41.74
S&P 500 Closed 0 4,205.52 0.07
NYSE Volume 0 4.24B
NYSE Advancers 0 1,408
NYSE Decliners 0 1,574
Nasdaq Volume 0 4.86B
Nasdaq Advancers 0 2,015
Nasdaq Decliners 0 2,429
New Highs/Lows
05/23 05/24 05/25 05/26 05/29 05/30
--------------------------------------------
NYSE New Highs 26 17 33 47 0 51
NYSE New Lows 31 85 144 75 0 78
Nasdaq New Highs 91 42 72 124 0 128
Nasdaq New Lows 77 122 192 142 0 146
Stocks Covered Today Stock Splits
TRADER'S TIP: "Let The Trade Come To You"
It rarely pays to chase a stock, so don't chase it - let the trade come to you. You have two options when you realize a move is already underway. Either forget the trade and look for another one, or wait for the price to move back to support or resistance THEN enter on the rebound. Waiting for a pullback usually provides a relatively low risk entry - because you can place a tight stop just beyond the support or resistance level. Remember - don't worry if you miss a trade, there is always another.
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 - 4205.52 May 30, 2023
52-Week High: 4325.28
52-Week Low: 3491.58
Daily Trend: UP
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 4391.88
Resistance 2: 4282.99
Resistance 1: 4244.21
Pivot: 4174.09
Support 1: 4135.32
Support 2: 4065.20
Support 3: 3956.31
NASDAQ Composite - 13017.43 May 30, 2023
52-Week High: 13181.09
52-Week Low: 10088.83
Daily Trend: UP
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 13969.93
Resistance 2: 13383.87
Resistance 1: 13179.78
Pivot: 12797.81
Support 1: 12593.72
Support 2: 12211.75
Support 3: 11625.69
Dow Industrials - 33042.78 May 30, 2023
52-Week High: 34712.28
52-Week Low: 28660.94
Daily Trend: UP
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 34915.54
Resistance 2: 33989.80
Resistance 1: 33541.57
Pivot: 33064.06
Support 1: 32615.83
Support 2: 32138.32
Support 3: 31212.58
Stocks Covered Today Stock Splits
Market Calendar
ECONOMIC REPORTS AND EVENTS (all times are Eastern): Monday, May 29, 2023: 29-May Memorial Day, all markets closed Tuesday, May 30, 2023: 30-May 9:00 am S&P Case-Shiller home price index (20 cities) 30-May 1:00 pm Richmond Fed President Tom Barkin speaks 30-May 10:00 am Consumer confidence Wednesday, May 31, 2023: 31-May 8:15 am ADP employment 31-May 9:45 am Chicago Business Barometer 31-May 10:00 am Job openings 31-May 12:30 pm Philadelphia Fed President Patrick Harker speaks 31-May 2:00 pm Federal Reserve Beige Book Thursday, June 01, 2023: 01-Jun 8:30 am Initial jobless claims 01-Jun 8:30 am Continuing jobless claims 01-Jun 8:30 am U.S. productivity 01-Jun 10:00 am ISM manufacturing 01-Jun 10:00 am Construction spending 01-Jun 1:00 pm Philadelphia Fed President Patrick Harker speaks Friday, June 02, 2023: 02-Jun 8:30 am U.S. employment report 02-Jun 8:30 am U.S. unemployment rate 02-Jun 8:30 am U.S. hourly wages 02-Jun 8:30 am Hourly wages year over year 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: "Earnings: Holding Through or Getting Back In"
It's no secret that we believe in avoiding undue risk. Because earnings reports often end up surprising traders, we often suggest closing out positions before the company announces earnings. However, if a stock is moving in a solid trend (long or short) and earnings estimates support that trend, experienced traders will often elect to drastically reduce the number of shares in their position and hold them through the earnings announcement.
In some cases traders jump back into the trade after the company reports better than expected earnings. This can be profitable at times, but don't chase the stock. If it has jumped more than 5% beyond your exit point, you're probably better off waiting for price to pull back to a moving average support level.
Stocks Covered in This Issue
CONSUMER CYCLICAL SECTOR
Foot Locker, Inc. (FL: Consumer Cyclical/Apparel Retail) - SQUEEZE PLAY. Traders are feeling the pressure as FL'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 26.88 and a SELL short entry at 24.89. FL's price movement will decide which entry is filled. As soon as you're in the trade, enter a 1.99 trailing stop. Tighten it to 1 after you get a 2.58 gain. FL closed Tuesday at 26.03. Earnings Report Date: Aug 17, 2023. Beta: 1.21. Market-Cap: 2.432B. Optionable.
FINANCIAL SERVICES SECTOR
WesBanco, Inc. (WSBC: Financial Services/Banks-Regional) - SQUEEZE PLAY. Tuesday's trading session left WSBC in a very narrow price range after buyers and sellers fought to a near stalemate. Both sides are looking for some traction, and a breakout either way could provide a nice gain in the short term. To get aboard, set your BUY trigger at 24.85 and your SELL short trigger at 23.27. One of the orders will be triggered by upcoming price action. When your market order is filled, cancel the remaining trigger and enter a 1.58 trailing stop. Once you have a 2.58 profit, reduce the stop to 0.79. Earnings Report Date: Jul 24, 2023. Beta: 0.92. Market-Cap: 1.449B. Optionable.
Customers Bancorp, Inc. (CUBI: Financial Services/Banks-Regional) - SQUEEZE PLAY. CUBI is stuck in a Bull/Bear deadlock. Fortunately for traders this impasse should be resolved soon, with one side or the other taking control. We want to be positioned for a potential quick move up or down, so get ready to catch this train with a BUY entry at 25.26 and a SELL short entry at 23.07. Once your trade is filled, enter a 2.19 trailing stop. Tighten it to 1.1 after a 3.14 gain. CUBI closed on Tuesday at 24.64. Earnings Report Date: Jul 25, 2023. Beta: 1.51. Market-Cap: 770M. Optionable.
HEALTHCARE SECTOR
Pliant Therapeutics, Inc. (PLRX: Healthcare/Biotechnology) - SQUEEZE PLAY. PLRX shareholders know what it feels like to be squeezed. Tuesday's slim price range reveals uncertainty on both sides of the table, a situation which often resolves itself by either Bears or Bulls quickly gaining a clear advantage. The question is "who will win?" Near-term market action tell us whether we should sell short or we should buy shares instead. PLRX closed Tuesday at 21.30. The plan is to enter in the right direction by placing a BUY trigger at 22.24 and a SELL short trigger at 20.5. Once PLRX establishes direction, place your triggered order. As soon as you are in the trade, place a trailing stop in the amount of 1.74. After you've collected a 3.04 profit, tighten the stop to 0.87. Earnings Report Date: Aug 07, 2023. Beta: 1.38. Market-Cap: 1.26B. Optionable.
REAL ESTATE SECTOR
Peakstone Realty Trust (PKST: Real Estate/REIT-Diversified) - SQUEEZE PLAY. The ticker for Tuesday's session shows PKST is now stuck in a tight price band. With the cyclical contraction and expansion nature of volatility in force, we should see a new period of price expansion in the days ahead. To improve the odds of catching the next directional wave, place a BUY trigger at 24.82 and a SELL short trigger at 22.34. When PKST starts moving out of its narrow range, your order will be triggered. Once you're in the trade, cancel the opposing trigger and set a 2.48 trailing stop. Upon reaching a 5.1 profit, resize the stop to 1.24. Earnings Report Date: N/A. Beta: N/A. Market-Cap: 840.761M. 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.
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