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May 6, 2023 - The RightLine Report
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NOTES FROM THE EDITOR
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Ask the question "What is a stock trader's main goal?" and you'll probably hear something like "To make a lot of money!" It surprises many people to find that the major goal of a truly successful trader isn't to make money, but to make the best trades possible.
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"QUICK LIST"
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Stock 05/05 05/05 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
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FVRR 26.76 0.37 27.68 25.73 1.95/0.98 2.56
BAX 46.05 0.75 46.78 2.85/1.43 1.8
VKTX 22.86 1.19 23.38 21.25 2.13/1.07 2.48
MATW 38.08 1.26 38.69 2.54/1.27 1.56
CVEO 20.19 0.68 20.48 19.22 1.26/0.63 1.78
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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US stocks finished a challenging week on a high note with the major indices closing sharply higher on Friday. Key moments for the week included the latest Fed Bank rate hike and continued worries over regional banks. Traders responded positively to Friday's release of the April jobs report, which showed the labor market remains in good shape. The 10-year Treasury yield topped 3.4%, as bond traders interpreted the strong job gains as a potential piece of evidence that the FMOC (Federal Open Market Committee) will decide to keep loan rates to banks higher for longer. In equties, financial services stocks were boosted by gains among the regional banks, while the technology sector got a nice lift from Apple's latest quarterly results. Overall, sector leadership for the session reflected a more bullish tone for the economic environment. Friday On The Week
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Dow 33,674.38 546.64 -423.78 -1.24%
Nasdaq 12,235.41 269.01 +8.83 0.07%
S&P 500 4,136.25 75.03 -33.23 -0.8%
NYSE Volume 4.19B
NYSE Advancers 2,549
NYSE Decliners 438
Nasdaq Volume 4.58B
Nasdaq Advancers 3,224
Nasdaq Decliners 1,183
New Highs/Lows
04/28 05/01 05/02 05/03 05/04 05/05
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NYSE New Highs 72 83 41 79 38 48
NYSE New Lows 37 35 152 104 258 49
Nasdaq New Highs 71 103 62 78 60 101
Nasdaq New Lows 153 198 443 281 476 135
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TRADER'S TIP:
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TRADER'S TIP: "Know Before You Go" Before entering a trade, carefully plan "what you will do" and "when you will do it" once you are in the position. Actually, this is much more important than finding the "perfect" entry. And always include an exit plan for three possible scenarios: the trade moves favorably, unfavorably, or doesn't move at all. Be sure to include the specific exit price when planning stop-losses. When using the trailing stop method to lock in gains, make certain that you decide in advance at what point the trailing stop will be adjusted. **************************
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 - 4136.25 May 5, 2023 52-Week High: 4325.28 52-Week Low: 3491.58 Daily Trend: DOWN Weekly trend: UP Weekly Pivot Levels Resistance 3: 4401.09 Resistance 2: 4262.45 Resistance 1: 4199.35 Pivot: 4123.81 Support 1: 4060.71 Support 2: 3985.17 Support 3: 3846.53 https://www.prorightline.com/rlch/050523SPX.jpg--ECONOMIC REPORTS AND EVENTS (all times are Eastern): Monday, May 08, 2023: 08-May MONDAY, MAY 8 08-May 10:00 am Wholesale inventories 08-May 2:00 pm Fed Senior Loan Survey 08-May TUESDAY, MAY 9 Tuesday, May 09, 2023: 09-May 6:00 am NFIB optimism index 09-May WEDNESDAY, MAY 10 Wednesday, May 10, 2023: 10-May 8:30 am Consumer price index 10-May 8:30 am Core CPI 10-May 8:30 am CPI year over year 10-May 8:30 am Core CPI year over year 10-May THURSDAY, MAY 11 Thursday, May 11, 2023: 11-May 8:30 am Producer price index 11-May 8:30 am Core PPI 11-May 8:30 am PPI year over year 11-May 8:30 am Core PPI year over year 11-May 8:30 am Initial jobless claims 11-May 8:30 am Continuing jobless claims 11-May FRIDAY, MAY 12 Friday, May 12, 2023: 12-May 8:30 am Import price index 12-May 8:30 am Import price index minus fuel 12-May 10:00 am Consumer sentiment (preliminary) 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: "Successful Trading: In Search of the Rules" Assuming a new trader doesn't quit early in the game, they will gradually begin to realize that there are certain rules that can't be violated without severe consequence. When they accept this, much of the stress and frustration they have felt disappears. Unfortunately the majority of new traders give up before discovering that they lost their money because they were breaking most if not all of the rules. Once a trader opens up to the possibility that there are some very important aspects of trading that they must know to be successful, it becomes much easier for them to recognize what the rules are. ***********************************
STOCKS COVERED IN THIS ISSUE
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COMMUNICATION SERVICES SECTOR Fiverr International Ltd. (FVRR: Communication Services/Internet Content & Information) - SQUEEZE PLAY. Sometimes when Bulls and Bears face off in the market arena for a typical day-long battle, there is no clear winner. This is evident when the daily price range contracts to an unusually narrow state. FVRR found itself in this condition on Friday when neither buyers or sellers were able to push ahead. This setup provides traders a chance to hop on board the next breakout - whether it's to the upside or down - with little risk of loss. To do this place a BUY order at 27.68 and a SELL short trigger at 25.73. When FVRR moves outside of Friday's range, one of the orders will be filled. Once you hold a position of shares, cancel the unfilled order and place a 1.95 trailing stop. After you've got a 2.56 profit, tighten the stop to 0.98. FVRR closed at 26.76 on Friday. Earnings Report Date: May 11, 2023. Beta: 1.72. Market-Cap: 1.119B. Optionable. HEALTHCARE SECTOR Baxter International Inc. (BAX: Healthcare/Medical Instruments & Supplies) - BULLISH BOUNCE. Here is another example of a stock in an established uptrend that has recently experienced a counter-trend drop. The sliding price action has now found support near a moving average zone, bouncing upward during Friday's session to close at 46.05. Anticipate the rebound to continue, and be ready to buy BAX at 46.78. Follow your entry with a trailing stop of 2.85 which can be tightened to 1.43 on a 1.8 profit. Earnings Report Date: Jul 26, 2023. Beta: 0.56. Market-Cap: 24.179B. Optionable. Viking Therapeutics, Inc. (VKTX: Healthcare/Biotechnology) - SQUEEZE PLAY. In certain stocks a tightly constricted price range is a sign that neither bulls nor bears are confident of winning in the near term. This often means that the side that gives up first causes a quick move in the opposite direction. In these fear dominated skirmishes, opposing traders always benefit from the retreat. In the Squeeze Play setup you can actually play both sides of the inevitable surge. VKTX traders reached this state of stand-off on Friday with the tightest range of the past seven days. You can take advantage of their efforts by placing a low risk BUY trigger at 23.38 and a SELL short trigger at 21.25. After one of the two orders is filled, cancel the un-triggered order and place a trailing stop at 2.13 which can be tightened to 1.07 on a 2.48 gain. VKTX closed Friday at 22.86. Earnings Report Date: Jul 25, 2023. Beta: N/A. Market-Cap: 2.276B. Optionable. INDUSTRIALS SECTOR Matthews International Corporation (MATW: Industrials/Conglomerates) - BULLISH BOUNCE. Looking a bit frayed after sliding downhill in recent sessions, on Friday MATW seemed intent on initiating a rebound. With moving average support nearby, MATW is at a logical place for Bulls to regroup and extend the familiar uptrend that shareholders have become accustomed to. On continued buying, plan on taking long entries with a BUY at 38.69. Manage risk with a 2.54 stop. Tighten your stop to 1.27 when you have a 1.56 profit. MATW ended the day at 38.08. Earnings Report Date: Jul 26, 2023. Beta: 1.12. Market-Cap: 1.16B. Optionable. Civeo Corporation (CVEO: Industrials/Specialty Business Services) - SQUEEZE PLAY. The struggle between buyers and sellers has resulted in CVEO's narrowest trading range of the past seven sessions. With neither group able to take complete control on Friday, the stock's short term destiny is up for grabs. You can capitalize on this unusually tight condition by placing both a BUY order at 20.48 and a SELL order at 19.22. Regardless of which order is triggered, cancel the other one and follow your entry with a 1.26 trailing stop. Tighten the stop to 0.63 once you have a 1.78 gain. CVEO closed Friday at 20.19. Earnings Report Date: Jul 27, 2023. Beta: 2.61. Market-Cap: 315.083M. 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/ **********************************
TRADER'S CORNER
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"Index and Sector Stocks" Want to trade the entire Nasdaq, Dow, or S&P 500 in one stock? Index stocks and sector stocks (formally known as ETFs, or Exchange Traded Funds) provide a convenient way to invest in ALL of the leading companies in a top index or industry. Similar to mutual funds, sector and index stocks provide access to a "basket" of stocks in an entire index or industry sector through a single transaction. Sector and index stocks trade just like any other stock and can be used for short-term or longer-term strategies. Short-term traders love them because they are very liquid, can easily be traded both long or short on margin, and tend to move closely with their related indices. For long-term investors, these stocks provide unique tax advantages, and unlike mutual funds there are no management fees. Just as "normal" stocks represent ownership in a publicly traded company, sector and index stocks signify ownership in a Unit Investment Trust, or UIT - a collection of securities (stocks for our purposes) bundled together in a trust. Due to the number of stocks in each group, sector and index stocks provide an element of safety through diversification, and are usually less volatile than the individual stocks they represent. They generally provide a lower-stress way to trade highly volatile markets. Sector stocks are represented by individual stock symbols - here are several examples: SPY - Formally named Standard & Poor's Depositary Receipts, SPDRs are commonly called "Spiders" and represent the basket of stocks in the S&P 500 (SPX). This was the first index stock and was created by the American Stock Exchange in January 1993. DIA - The Dow Industrial Average Model of New Depository Shares (DIAMONDS) represent the basket of 30 stocks in the DOW (DJX or INDU). QQQQ - Represents the stocks in the Nasdaq 100 (NDX). HOLDRS - HOLding Company Depositary ReceiptS represent the common stock of companies from a specific industry segment. Merrill Lynch launched HOLDRS for trading on the Amex stock exchange, which is now the NYSE MKT LLC Equities exchange. For more information on Merrill Lynch's current HOLDRS and the stocks represented by each one, go to the following link: https://www.holdrs.com/holdrs/main/index.asp?Action=Outstanding FFX - Fortune 500 index represents the companies in the Fortune 500. FEX - Fortune e-50 index represents the top 50 Internet economy companies. IShares Sector Funds provide investment vehicles similar to HOLDRS and are modeled after specific index funds based on the Russell 2000, Morgan Stanley Capital International (MSCI) Index Fund Series, S&P 500, and the DOW indices. IShares are the world's most extensive family of Exchange Traded Funds (ETFs). You can trade index and sector stocks exactly the same way you trade regular stocks through any brokerage. HOLDRS require a minimum purchase of 100 shares, but you can buy a single share of the other sector stocks. The lower volatility of sector stocks makes them relatively easy on the nerves to trade, but as with any trade, risk management is critical and stops must be used to protect against the market moving against a position. Good luck! Note: For more on Index and Sector Funds (ETFs) go to the following webpage: https://prorightline.com/education/etfs.html ======================================================================
Best of luck and have a Great Week!
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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 To Unsubscribe, send an email to cs@prorightline.com or call 1-312-248-4241. |