May 9, 2023 - The RightLine Report
Notes From The Editor
Trading the After-Hours Market - Part III
We recently reviewed the specific risks associated with trading stocks outside of the regular market hours, so now let's look at a couple of ways that the after-hours market can be used to make a few bucks.
It should be pretty obvious by now that the pre-market and after-hours trading sessions are not treasure troves of easy pickings. In fact my experience trading these extended hours has convinced me that the opposite is true. I have found that in most cases trading my usual strategies outside the normal session hours is usually NOT worth the added risks. Having said that, I have also found that under certain conditions buying or selling stocks during the pre-market and after market hours can be very profitable.
For example, when flipping stocks it is sometimes easier to locate good candidates immediately after the market closes. Though it is preferable to select and buy "flips" before the closing bell at 4:00 pm et, there are times when you will suddenly realize that the regular market session has already closed for the day, and that it finished in a strong up-trend. This is a situation when being able to quickly scan for stocks that have closed near their highs of the day and then buying one or more of them in the aftermarket often results in a successful flip.
The same is true when selling flips early the next session. If you routinely watch the ticker of a particular stock in the pre-market hours you will soon become familiar with the normal progression, fluctuation and volume associated with it as the opening bell approaches. Once you learn to recognize the rhythm of the price movement you can use that information to time your sale. This can be either selling early before the price wanes, or holding until after the open in anticipation of benefiting from an enthusiastic price surge.
Here's a final note on trading during extended hours; though I would encourage most traders to trade during the normal session instead of outside it, you can certainly use these periods to enhance your entry and exit opportunities, or even for emergencies when needed. Here's an example ...
Let's say you own a good performing stock with consistent good earnings that has been in an uptrend for several days. Forty-five minutes after the market closes you find out that the top officers in the company have just been busted in a surprise raid by the SEC for cooking the books. You check the stock price and see it's starting to drop fast.
If something like that occurs you can sell immediately in the after-market and usually avoid most of the damage that will inevitably follow. These types of problems don't go away overnight, and they almost always get much worse before they get better. These situations can present ideal shorting conditions as well. Regardless of whether you just want out or are looking for a quick short-sale, having speedy access to the extended market during such times can give you a powerful advantage.
Trade well!
Thomas Sutton, Editor
NOTE: For more on "Flipping Stocks" go to https://prorightline.com/online-stock-trading-flipping-stocks/
Stocks Covered Today Stock Splits
Quick List
Stock 05/09 05/09 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
------ -------- -------- -------- -------- --------------- --------
CRT 21.16 0.36 21.76 20.07 1.69/0.85 2.32
SIBN 21.68 -0.31 22.38 20.75 1.63/0.82 1.76
INTT 20.80 -0.52 21.49 19.93 1.56/0.78 2.5
AVID 21.39 -0.37 22.21 20.56 1.65/0.83 1.9
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
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Stocks Covered Today Stock Splits
Market Summary
US stocks closed near even on Tuesday as traders wait for inflation and debt-ceiling developments to unfold. There was no major economic data on the calendar, but sentiment was tentative over concerns about the US government debt ceiling. Joe Biden met with House Speaker Kevin McCarthy for their first meeting in three months as they attempt to srike a deal. In other news, the Federal Reserve Bank's latest Senior Loan Officer Opinion Survey indicates banks are continuing to tighten lending standards, but the tightening is not as severe as it could have been given the recent turmoil in the banking sector. With banks less willing to lend and demand for loans getting weaker, inflation and economic growth will probably slow further in the months ahead. Bond yields remained steady ahead of the inflation report on Wednesday, and the dollar was slightly higher.
May 8, 2023 May 9, 2023
-------------------- --------------------
Dow 33,618.69 -55.69 33,561.81 -56.88
Nasdaq 12,256.92 21.50 12,179.55 -77.36
S&P 500 4,138.12 1.87 4,119.17 -18.95
NYSE Volume 3.65B 3.81B
NYSE Advancers 1,405 1,202
NYSE Decliners 1,574 1,753
Nasdaq Volume 4.23B 4.14B
Nasdaq Advancers 2,131 1,870
Nasdaq Decliners 2,273 2,547
New Highs/Lows
05/02 05/03 05/04 05/05 05/08 05/09
--------------------------------------------
NYSE New Highs 41 79 38 48 59 49
NYSE New Lows 152 104 258 49 44 76
Nasdaq New Highs 62 78 60 101 82 87
Nasdaq New Lows 443 281 476 135 113 189
Stocks Covered Today Stock Splits
TRADER'S TIP: "Missed The Breakout? Watch For A Pullback Entry"
New-High breakouts often return to prior resistance levels before resuming the move higher. Once a new 52-week high is set, examine the chart to locate the point of initial breakout and be ready to enter on a bounce from this level.
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 - 4119.17 May 9, 2023
52-Week High: 4325.28
52-Week Low: 3491.58
Daily Trend: UP
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
NASDAQ Composite - 12179.55 May 9, 2023
52-Week High: 13181.09
52-Week Low: 10088.83
Daily Trend: UP
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 12820.79
Resistance 2: 12481.33
Resistance 1: 12358.37
Pivot: 12141.87
Support 1: 12018.91
Support 2: 11802.41
Support 3: 11462.95
Dow Industrials - 33561.81 May 9, 2023
52-Week High: 34712.28
52-Week Low: 28660.94
Daily Trend: DOWN
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 36263.89
Resistance 2: 34943.56
Resistance 1: 34308.97
Pivot: 33623.23
Support 1: 32988.64
Support 2: 32302.90
Support 3: 30982.57
Stocks Covered Today Stock Splits
Market Calendar
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
Stocks Covered Today Stock Splits
TRADER'S TIP: "The Four Stages of Market Action"
A study of price charts reveals that all markets have the same basic movements. First is the accumulation or consolidation stage, which occurs at the bottom of a market; this is often referred to as a "base building" period. The second stage is the rally or run-up stage that occurs when stocks trend higher. The third stage is the distribution stage, another form of consolidation that signals the top of a market. The fourth stage is the sell off, or declining stage. Most markets spend over 80% of the time in the consolidation stages, when it is usually best to trade for short-term profits.
Stocks Covered in This Issue
ENERGY SECTOR
Cross Timbers Royalty Trust (CRT: Energy/Oil & Gas E&P) - SQUEEZE PLAY. CRT 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 21.76 and a SELL short entry at 20.07. Once your trade is filled, enter a 1.69 trailing stop. Tighten it to 0.85 after a 2.32 gain. CRT closed on Tuesday at 21.16. Earnings Report Date: N/A. Beta: 0.77. Market-Cap: 126.96M. Not Optionable.
HEALTHCARE SECTOR
SI-BONE, Inc. (SIBN: Healthcare/Medical Devices) - SQUEEZE PLAY. Tuesday's narrow price range has created a potentially profitable setup in SIBN, as sellers and buyers find themselves in a near tie for control of price direction. The next short-term trend could go either way, so prepare for a move out of the draw within the next day or so. Set a BUY entry at 22.38 and a SELL short entry at 20.75. Let SIBN's price action determine your long or short entry. Once the order is filled, place a 1.63 trailing stop, and tighten it to 0.82 upon getting a 1.76 gain. SIBN closed Tuesday at 21.68. Earnings Report Date: Aug 07, 2023. Beta: 0.95. Market-Cap: 762.789M. Optionable.
TECHNOLOGY SECTOR
inTEST Corporation (INTT: Technology/Semiconductor Equipment & Materials) - SQUEEZE PLAY. Tuesday's trading session left INTT 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 21.49 and your SELL short trigger at 19.93. One of the orders will be triggered by upcoming price action. When your market order is filled, cancel the remaining trigger and enter a 1.56 trailing stop. Once you have a 2.5 profit, reduce the stop to 0.78. Earnings Report Date: Aug 02, 2023. Beta: N/A. Market-Cap: 231.579M. Optionable.
Avid Technology, Inc. (AVID: Technology/Software-Application) - SQUEEZE PLAY. Traders are feeling the pressure as AVID'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 22.21 and a SELL short entry at 20.56. AVID's price movement will decide which entry is filled. As soon as you're in the trade, enter a 1.65 trailing stop. Tighten it to 0.83 after you get a 1.9 gain. AVID closed Tuesday at 21.39. Earnings Report Date: Jul 31, 2023. Beta: 1.21. Market-Cap: 939.19M. 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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