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November 15, 2022 - The RightLine Report
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NOTES FROM THE EDITOR
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"Playing the Momenteum" is a trading method focusing on stocks that are moving in one direction on high volume. This type of momentum setup pays little or no concern to the company's fundamentals. Traders who follow this strategy know that trending stocks are more likely to continue in the same direction versus stocks which are not trending.
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"QUICK LIST"
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Stock 11/15 11/15 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
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GIII 21.19 0.71 21.94 20.34 1.6/0.8 1.66
PTLO 22.54 -2.33 23.26 21.71 1.55/0.78 1.68
SDGR 22.27 0.68 23.04 21.32 1.72/0.86 2.24
BE 21.99 0.42 22.97 21.27 1.7/0.85 2.02
PWSC 21.03 0.67 21.53 20.01 1.52/0.76 1.38
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 top US stock indices chalked up gains following the release of data showing wholesale price inflation isn't growing as fast as expected. This follows other recent reports of less-agressive consumer price inflation, which appear to be lowering market expectations about how aggressive the Fed could remain with its current hawkish monetary policy tightening stance. The economic calendar also included the Empire Manufacturing Index which indicated manufacturing activity is expanding in the New York region, versus predictions of it remaining in a contraction zone. In equities news, Home Depot (HD $312) and Walmart (WMT $147) both topped earnings expectations. Treasury yields and the USD/dollar were lower, gold and oil prices rallied higher. Nov 14, 2022 Nov 15, 2022
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Dow 33,536.70 -211.16 33,592.92 56.22
Nasdaq 11,196.22 -127.11 11,358.41 162.19
S&P 500 3,957.25 -35.68 3,991.73 34.48
NYSE Volume 4.61B 5.03B
NYSE Advancers 941 2,428
NYSE Decliners 2,267 777
Nasdaq Volume 5.07B 5.64B
Nasdaq Advancers 1,776 3,117
Nasdaq Decliners 2,925 1,563
New Highs/Lows
11/08 11/09 11/10 11/11 11/14 11/15
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NYSE New Highs 77 37 75 81 54 65
NYSE New Lows 97 167 50 35 24 28
Nasdaq New Highs 111 85 139 110 83 107
Nasdaq New Lows 297 511 212 152 113 124
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TRADER'S TIP:
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TRADER'S TIP: "Market Direction & Economic Reports" For a quick and easy table that shows what price movement to expect from just about any economic report, go to: http://www.rightline.net/education/economic.html. **************************
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 - 3991.73 November 15, 2022 52-Week High: 4818.62 52-Week Low: 3491.58 Daily Trend: UP Weekly trend: UP Weekly Pivot Levels Resistance 3: 4427.39 Resistance 2: 4170.13 Resistance 1: 4081.53 Pivot: 3912.87 Support 1: 3824.27 Support 2: 3655.61 Support 3: 3398.35 https://www.prorightline.com/rlch/111522SPX.jpg--ECONOMIC REPORTS AND EVENTS (all times are Eastern): Monday, November 21, 2022: 14-Nov 11 am NY Fed 1-year inflation expectations 14-Nov 11 am NY Fed 5-year inflation expectations Tuesday, November 15, 2022: 15-Nov 8:30 am Producer price index final demand 15-Nov 8:30 am Empire state manufacturing index 15-Nov 11 am Real household debt (SAAR) 15-Nov 11 am Real mortgage debt (SAAR) Wednesday, November 16, 2022: 16-Nov 8:30 am Retail sales 16-Nov 8:30 am Retail sales excluding vehicles 16-Nov 8:30 am Import price index 16-Nov 9:15 am Industrial production 16-Nov 9:15 am Capacity utilization rate 16-Nov 10 am Business inventories 16-Nov 10 am NAHB home builders' index Thursday, November 17, 2022: 17-Nov 8:30 am Initial jobless claims 17-Nov 8:30 am Continuing jobless claims 17-Nov 8:30 am Building permits (SAAR) 17-Nov 8:30 am Housing starts (SAAR) 17-Nov 8:30 am Philadelphia Fed manufacturing index Friday, November 18, 2022: 18-Nov 10 am Existing home sales (SAAR) 18-Nov 10 am Leading economic indicators 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: "Learning To Fly" Low-cost access to the markets via the Internet has without a doubt been the biggest single change to ever impact the stock market. In fact, it has literally revolutionized the entire industry. But cheap and fast trading tools don't produce successful traders and investors any more than cheap and fast planes produce good pilots. Just like learning to fly, learning to maneuver through the market profitably takes time, training, and sincere effort. ***********************************
STOCKS COVERED IN THIS ISSUE
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CONSUMER CYCLICAL SECTOR G-III Apparel Group, Ltd. (GIII: Consumer Cyclical/Apparel Manufacturing) - SQUEEZE PLAY. A look at GIII's daily chart shows what a price squeeze is all about. The constricted high-low daily trading range has produced a setup similar to a tightly coiled spring. Expect price to move sharply soon, with the direction yet to be determined. Let the upcoming market action resolve whether you will buy shares or sell short. To capture a move either way, place a BUY trigger at 21.94 and a SELL short trigger at 20.34. Once GIII shows which way it's headed, place your triggered entry order. As soon as your order is filled, follow with a trailing stop of 1.6 and tighten to 0.8 on a 1.66 gain. GIII closed Tuesday at 21.19. Earnings Report Date: Nov 29, 2022. Beta: 2.52. Market-Cap: 1.006B. Optionable. Portillo's Inc. (PTLO: Consumer Cyclical/Restaurants) - 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 PTLO. A move to the upside will trigger our BUY entry at 23.26, while a drop to 21.71 will trigger our SELL short entry. Follow your position with a 1.55 trailing stop. Tighten the stop to 0.78 once you have a 1.68 gain. PTLO closed Tuesday at 22.54. Earnings Report Date: N/A. Beta: N/A. Market-Cap: 955.766M. Optionable. HEALTHCARE SECTOR Schrödinger, Inc. (SDGR: Healthcare/Health Information Services) - SQUEEZE PLAY. SDGR is caught in a dilemma. The stock's compressed price range on Tuesday has resulted in a condition comparable to a wound up rubber band. We anticipate that this undecided equity will take off soon, but with the direction still in question we'll let upcoming market action tell us whether to buy shares or sell short. SDGR is now at 22.27. We can capture price action either way by placing a BUY trigger at 23.04 and a SELL short trigger at 21.32. Once SDGR reveals its direction, enter your triggered order and disregard the other one. As soon as your position is in place, follow up with a trailing stop of 1.72. When you acquire a 2.24 profit, tighten the stop to 0.86. Earnings Report Date: N/A. Beta: 1.06. Market-Cap: 1.586B. Optionable. INDUSTRIALS SECTOR Bloom Energy Corporation (BE: Industrials/Electrical Equipment & Parts) - SQUEEZE PLAY. Tuesday's trading action forced BE's daily price range into an abnormally narrow state. This translates into opportunity; for the cyclical nature of price volatility is to shrink extensively, then swell rapidly as shares move in one direction or another. Instead of trying to predict the direction BE will take when price volatility begins to increase, we'll set both a BUY (long) and a SELL (short) trigger to get us into the right trade. Be ready to BUY shares at 22.97 if BE moves higher, and place your order to SELL short at 21.27 if price declines to that level. As usual follow your entry with a trailing stop, 1.7 should be sufficient. Reduce your stop to 0.85 on a 2.02 gain. BE closed Tuesday at 21.99. Earnings Report Date: Feb 08, 2023. Beta: 2.87. Market-Cap: 4.292B. Optionable. TECHNOLOGY SECTOR PowerSchool Holdings, Inc. (PWSC: Technology/Software-Application) - SQUEEZE PLAY. Tuesday's narrow price range has created a potentially profitable setup in PWSC, 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 21.53 and a SELL short entry at 20.01. Let PWSC's price action determine your long or short entry. Once the order is filled, place a 1.52 trailing stop, and tighten it to 0.76 upon getting a 1.38 gain. PWSC closed Tuesday at 21.03. Earnings Report Date: N/A. Beta: N/A. Market-Cap: 4.194B. 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 ---------------- ------- -------- ------- ------ ------- 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!
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