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.
*********************************** "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" 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/ ***************************** 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 *********************************** TRADER'S TIP: *********************************** 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 ************************** 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 - 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 https://www.prorightline.com/rlch/110122SPX.jpg--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" at this link: https://prorightline.com/index.php/economic-indicator-effects/ *********************************** TRADER'S TIP: *********************************** 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 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 *********************************** 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 ---------------- ------- -------- ------- ------ ------- Copart CPRT 11/4/2022 11/4/2022 2-for-1 Yes 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! ********** If you prefer to receive this report in html with color and graphics, or have any questions, send us an email using our contact form at:https://prorightline.com/index.php/contact-us/ ====================================================================== 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. 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