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May 4, 2023 - The RightLine Report
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NOTES FROM THE EDITOR
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Trading the After-Hours Market
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"QUICK LIST"
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Stock 05/04 05/04 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
------ -------- -------- -------- -------- --------------- --------
BJRI 31.41 -0.30 32.35 2.9/1.45 1.94
CRT 20.17 0.37 20.73 19.1 1.63/0.82 2.08
SDGR 30.12 0.97 / 0
VRNA 20.88 -0.31 21.32 19.88 1.44/0.72 1.88
TDOC 25.25 -0.47 26.11 24.36 1.75/0.88 2.18
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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The major US stock indexes were lower on Thursday as persistent concerns over regional banks continue to weigh down price action. In equities, PacWest Bancorp shares fell more than 30% on the day and are now down over 70% in 2023. Treasury bond yields were also lower as investors buy into safe-haven assets. Traders have once again started to price in rate cuts by the Fed Bank, as early as September. In the meantime, one of the main consequences of the banking upheaval will be a tightening in lending standards, which will make it more difficult for both consumers and businesses to obtain loans. This will obviously stifle economic activity, but it also could marginally help ease inflationary pressures. May 3, 2023 May 4, 2023
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Dow 33,414.24 -270.29 33,127.74 -286.50
Nasdaq 12,025.33 -55.18 11,966.40 -58.93
S&P 500 4,090.75 -28.83 4,061.22 -29.53
NYSE Volume 4.26B 4.94B
NYSE Advancers 1,130 868
NYSE Decliners 1,841 2,108
Nasdaq Volume 5.8B 4.76B
Nasdaq Advancers 2,142 1,745
Nasdaq Decliners 2,229 2,662
New Highs/Lows
04/27 04/28 05/01 05/02 05/03 05/04
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NYSE New Highs 37 72 83 41 79 38
NYSE New Lows 55 37 35 152 104 258
Nasdaq New Highs 53 71 103 62 78 60
Nasdaq New Lows 219 153 198 443 281 476
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TRADER'S TIP:
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TRADER'S TIP: "Get Rich Quick" Only an extremely tiny percentage of individuals who enter the stock market to get rich quick ever accomplish that goal. Most of them bust our rather quickly. This is due to the tendency for "get rich quick" folks to accept way too much risk - usually by putting too much of their account into one position. **************************
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/ S&P 500 - 4061.22 May 4, 2023 52-Week High: 4325.28 52-Week Low: 3491.58 Daily Trend: DOWN Weekly trend: UP Weekly Pivot Levels Resistance 3: 4371.05 Resistance 2: 4250.34 Resistance 1: 4209.91 Pivot: 4129.63 Support 1: 4089.20 Support 2: 4008.92 Support 3: 3888.21 https://www.prorightline.com/rlch/050423SPX.jpg--ECONOMIC REPORTS AND EVENTS (all times are Eastern): Friday, May 05, 2023: 05-May 8:30 am U.S. employment report 05-May 8:30 am U.S. unemployment rate 05-May 8:30 am U.S. hourly wages 05-May 8:30 am Hourly wages year over year 05-May 3:00 pm Consumer credit 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: "Small Stocks & Big Moves" Studies show that most stocks which increase in price by ten times or more are "small-cap" or "micro-cap." This is due to the relatively low number of shares available. As demand for the stock increases, the price rises dramatically. If you want big explosive moves, think small- cap. ***********************************
STOCKS COVERED IN THIS ISSUE
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CONSUMER CYCLICAL SECTOR BJ's Restaurants, Inc. (BJRI: Consumer Cyclical/Restaurants) - BULLISH BOUNCE. BJRI's positive weekly uptrend is still intact despite recent selling that has driven share prices lower. Price action on Thursday shows that traders are aware of the moving average support zone now in play, and they are ready to consider buying again. A shift up from this point will attract even more buyers. The new buying should move BJRI back in step with the bullish weekly trend, so our BUY entry trigger is set at 32.35. Once you hold a position, trail a stop of 2.9. Tighten it to 1.45 on a 1.94 gain. BJRI closed at 31.41 on Thursday. Earnings Report Date: Jul 19, 2023. Beta: 1.94. Market-Cap: 748.155M. Optionable. ENERGY SECTOR Cross Timbers Royalty Trust (CRT: Energy/Oil & Gas E&P) - SQUEEZE PLAY. One interesting trait of price volatility is that it cycles back and forth through periods of expansion and contraction. Stocks that have recently seen their daily price range shift from an average or wide range to an extremely contracted state are ideal candidates for expansive price moves. In many cases the next move is relatively fast and covers a sizable amount of territory. To take advantage of these trades we use both a BUY and a SELL entry. This allows us to enter in whichever direction the breakout takes. In CRT's case we will enter a BUY should it reach the 20.73 level, or a SELL short trade if it drops to 19.1. As usual a trailing stop is essential, 1.63 which should be tightened to 0.82 on a 2.08 gain. CRT closed Thursday at 20.17. Earnings Report Date: N/A. Beta: 0.77. Market-Cap: 121.02M. Not Optionable. HEALTHCARE SECTOR Schrödinger, Inc. (SDGR: Healthcare/Health Information Services) - BULLISH BOUNCE. The charts for SDGR show that despite the downward pressure from sellers recently, the weekly uptrend is still going strong. Buyers showed up again on Thursday, resulting in the early stages of a rebound that started near moving average support. The resulting Bullish Bounce set-up offers a potential entry point for a long play. Set your trigger to BUY shares at , and follow your entry with a trailing stop of . Tighten it to when a 0 profit is reached. SDGR ended the latest session at 30.12. Earnings Report Date: May 04, 2023. Beta: 1.05. Market-Cap: 2.098B. Optionable. Verona Pharma plc (VRNA: Healthcare/Biotechnology) - SQUEEZE PLAY. When a stock's daily price range contracts to an unusually low point, you can safely assume that in most cases a breakout from that range will result in a nice price move. To capture a portion of this potential movement we have set both a long and a short entry into VRNA. A move to the upside will trigger our BUY entry at 21.32, while a drop to 19.88 will trigger our SELL short entry. Follow your position with a 1.44 trailing stop. Tighten the stop to 0.72 once you have a 1.88 gain. VRNA closed Thursday at 20.88. Earnings Report Date: May 09, 2023. Beta: 0.18. Market-Cap: 1.649B. Optionable. Teladoc Health, Inc. (TDOC: Healthcare/Health Information Services) - SQUEEZE PLAY. Trader indecision has put TDOC squarely in the center of a Bull versus Bear standoff. This tight spot should soon give way to a clear winner in the short-term, and we want to be in position for the move. To do that we've set a BUY entry at 26.11 and a SELL short entry at 24.36. Now it's up to TDOC to show us which entry will be filled. Once the trade is underway place a 1.75 trailing stop, which can be tightened to 0.88 after you achieve a 2.18 profit. TDOC closed on Thursday at 25.25. Earnings Report Date: Jul 25, 2023. Beta: 1.08. Market-Cap: 4.181B. 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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