November 1, 2022 - The RightLine Report
Notes From The Editor
Turbulent price action can sometimes wear on a trader's nerves. Fortunately, there are several ways that even the most sensitive among us can cope with the reality of a volatile market.
Here are four guidelines we can all benefit from, regardless of the time frames that we choose to trade and invest in.
1) Be sure of your time horizon.
Most people buy stocks without first considering how long they will own them. Are your plans short-term or long-term? It makes a big difference. Although history shows that the market generally goes up in the long run, it doesn't reveal what's just ahead.
2) Don't rely solely on the clock or calendar.
While this may sound odd at first, choosing our time horizon has as much to do with price movement as it does clock or calendar time. A trader who specializes in trading 15-minute bars has an idea of how much the price should move within that "time" frame. The actual amount of time in a "normal" trade of this type can be anywhere from 15- minutes to several hours, or on some occasions even a few days.
However, an experienced trader would never expect this type of trade to go on for weeks or months. He or she is always aware of the normal price movement that can be expected during the average trade time period, and doesn't plan on being in the trade indefinitely.
The same reasoning holds true for any chosen time frame, whether we are trading one-minute bars or monthly charts. Profit is the only part of the trading clock with cash value, so when making trade management decisions always consider your earnings too.
3) Get Control of the Risk Factor.
No matter how well we trade, sometimes we're going to be wrong. Despite all of the hype to the contrary, most successful traders win only about half of their trades. Using intelligent risk management tactics insures that losses won't hurt us.
4) Use Your Emotional Intelligence.
We've got to play the hand we're dealt, even if we don't like it. The stock market is much bigger than any one of us. We have no control over what it does, but we do have complete control over how we respond to it. Getting angry when the market goes down doesn't make it go back up, but the emotional stress from anger has the potential to cloud our judgment.
So don't be a fool ... stay cool and relax by the pool.
Trade well,
- Thomas Sutton, Editor
Stocks Covered Today Stock Splits
Quick List
Stock 11/01 11/01 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
------ -------- -------- -------- -------- --------------- --------
SSTK 49.96 -0.07 48.06 3.56/1.78 4
SASR 35.10 -0.34 33.82 2.69/1.35 2.1
ABBV 146.89 0.49 149.64 9.48/4.74 7.8
NOTV 20.56 -0.22 21.54 19.9 1.64/0.82 2.86
FORM 20.01 -0.20 21.12 19.33 1.79/0.9 2.32
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
The major US stock indexes were lower on Tuesday ahead of Wednesday's conclusion of the Federal Open Market Committee (FOMC) meeting, when the Fed Bank is expected to raise the fed funds target rate by another 75-basis points. In economic news, a bounce in the current tight labor market raised monetary policy tightening worries, while manufacturing reports show that activity remains in expansion territory and construction spending is surprisingly up from the previous month. On the equities front, pharmaceutical makers Pfizer (PFE $48) and Eli Lilly and Company (LLY $353) both released upbeat profit reports, with LLY lowering guidance and PFE raising it. Oil prices and gold finished the session higher, the USD/dollar was near even, treasuries were mixed.
Oct 31, 2022 Nov 1, 2022
-------------------- --------------------
Dow 32,732.95 -128.85 32,653.20 -79.75
Nasdaq 10,988.15 -114.31 10,890.85 -97.30
S&P 500 3,871.98 -29.08 3,856.10 -15.88
NYSE Volume 4.85B 4.49B
NYSE Advancers 1,501 1,890
NYSE Decliners 1,708 1,316
Nasdaq Volume 4.77B 4.7B
Nasdaq Advancers 2,089 2,637
Nasdaq Decliners 2,564 2,044
New Highs/Lows
10/25 10/26 10/27 10/28 10/31 11/01
--------------------------------------------
NYSE New Highs 70 82 76 89 94 98
NYSE New Lows 114 97 128 113 109 89
Nasdaq New Highs 105 132 109 121 138 140
Nasdaq New Lows 188 144 183 197 167 162
Stocks Covered Today Stock Splits
TRADER'S TIP: "No One Knows"
The stock market is a world shaped by human behavior, and no one has the slightest idea of what will happen in the future. Successful traders don't base their actions on what they THINK will happen, but instead they respond to what DOES happen. Price can only do three things; go up, go down, or go sideways. Plan ahead for all three, and you can react intelligently to whatever the market decides to do.
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 - 3856.10 November 1, 2022
52-Week High: 4818.62
52-Week Low: 3491.58
Daily Trend: UP
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 4176.91
Resistance 2: 4013.14
Resistance 1: 3957.10
Pivot: 3849.37
Support 1: 3793.33
Support 2: 3685.60
Support 3: 3521.83
NASDAQ Composite - 10890.85 November 1, 2022
52-Week High: 16212.23
52-Week Low: 10088.83
Daily Trend: DOWN
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 12002.82
Resistance 2: 11505.77
Resistance 1: 11304.11
Pivot: 11008.72
Support 1: 10807.06
Support 2: 10511.67
Support 3: 10014.62
Dow Industrials - 32653.20 November 1, 2022
52-Week High: 36952.65
52-Week Low: 28660.94
Daily Trend: UP
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 35761.14
Resistance 2: 34032.74
Resistance 1: 33447.27
Pivot: 32304.34
Support 1: 31718.87
Support 2: 30575.94
Support 3: 28847.53
Stocks Covered Today Stock Splits
Market Calendar
ECONOMIC REPORTS AND EVENTS (all times are Eastern): Monday, October 31, 2022: 31-Oct 9:45 am Chicago PMI Tuesday, November 01, 2022: 01-Nov 9:45 am 01-Nov 10 am ISM manufacturing index 01-Nov 10 am Jobs openings 01-Nov 10 am Quits 01-Nov 10 am Construction spending 01-Nov Varies Motor vehicle sales (SAAR) Wednesday, November 02, 2022: 02-Nov 8:15 am ADP employment report (level change) 02-Nov 10 am Rental vacancy rate 02-Nov 2 pm FOMC announcement 02-Nov 2:30 pm Fed Chair Jerome Powell press conference Thursday, November 03, 2022: 03-Nov 8:30 am Initial jobless claims 03-Nov 8:30 am Continuing jobless claims 03-Nov 8:30 am Foreign trade deficit 03-Nov 8:30 am Productivity (SAAR) 03-Nov 8:30 am Unit labor costs (SAAR) Friday, November 04, 2022: 04-Nov 8:30 am Nonfarm payrolls (level change) 04-Nov 8:30 am Unemployment rate 04-Nov 8:30 am Average hourly earnings 04-Nov 8:30 am Labor-force participation rate, ages 25-54 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 Conference Calls"
Since the SEC implemented the Fair Disclosure laws, most companies have begun allowing individual shareholders to listen in on earnings conference calls that were previously limited to analysts only. If you are tracking a stock as it approaches its scheduled earnings announcement, always look for the related conference call and mark it on your calendar.
The behavior of the stock during the call can telegraph early reaction to management's explanation of earnings related events. If you can't find any mention of the call, give the firm's Investor Relations department a ring and ask when or if a call will be held.
Stocks Covered in This Issue
COMMUNICATION SERVICES SECTOR
Shutterstock, Inc. (SSTK: Communication Services/Internet Content & Information) - BEARISH U-TURN. Stocks stuck in a downtrend like SSTK tend to bounce downhill rather than slide lower in a straight line. After interacting with a moving average resistance level on Tuesday, SSTK is poised to drop again. To take advantage of this setup, prepare to SELL shares short at 48.06. As usual, follow your entry with a trailing stop. A 3.56 stop will fit SSTK's current price range. Tighten it to 1.78 on a 4 gainer. Earnings Report Date: N/A. Beta: 1.12. Market-Cap: 1.789B. Optionable.
FINANCIAL SERVICES SECTOR
Sandy Spring Bancorp, Inc. (SASR: Financial Services/Banks-Regional) - BEARISH U-TURN. Sometimes traders hear about a stock that's in trouble and then short it without any thought to timing the entry. This method often results in less profits even when the trade moves in the desired direction. The Bearish U-Turn setup provides a smoother entry than just jumping in. It also reduces risk by placing both the entry trigger and exit stop near the top of the reversal. We'll use this approach with SASR which met our setup requirements on Tuesday. The SELL short trigger for this trade is set at 33.82, and the trailing stop is sized at 2.69. Reset the stop to 1.35 upon getting a 2.1 point gain. SASR closed Tuesday at 35.10. Earnings Report Date: Jan 18, 2023. Beta: 1.00. Market-Cap: 1.582B. Optionable.
HEALTHCARE SECTOR
AbbVie Inc. (ABBV: Healthcare/Drug Manufacturers-General) - BULLISH BOUNCE. Looking a bit frayed after sliding downhill in recent sessions, on Tuesday ABBV seemed intent on initiating a rebound. With moving average support nearby, ABBV 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 149.64. Manage risk with a 9.48 stop. Tighten your stop to 4.74 when you have a 7.8 profit. ABBV ended the day at 146.89. Earnings Report Date: Jan 31, 2023. Beta: 0.65. Market-Cap: 259.716B. Optionable.
Inotiv, Inc. (NOTV: Healthcare/Diagnostics & Research) - SQUEEZE PLAY. Tuesday's narrow price range has created a potentially profitable setup in NOTV, 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 21.54 and a SELL short entry at 19.9. Let NOTV's price action determine your long or short entry. Once the order is filled, place a 1.64 trailing stop, and tighten it to 0.82 upon getting a 2.86 gain. NOTV closed Tuesday at 20.56. Earnings Report Date: Dec 14, 2022. Beta: 2.66. Market-Cap: 526.223M. Optionable.
TECHNOLOGY SECTOR
FormFactor, Inc. (FORM: Technology/Semiconductors) - SQUEEZE PLAY. Traders are feeling the pressure as FORM'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 21.12 and a SELL short entry at 19.33. FORM's price movement will decide which entry is filled. As soon as you're in the trade, enter a 1.79 trailing stop. Tighten it to 0.9 after you get a 2.32 gain. FORM closed Tuesday at 20.01. Earnings Report Date: Jan 31, 2023. Beta: 1.26. Market-Cap: 1.543B. 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
---------------- ------- -------- ------- ------ -------
Copart CPRT 11/4/2022 11/4/2022 2-for-1 Yes
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