November 16, 2023 - The RightLine Report
Notes From The Editor
A Trader's Perspective
Here are few thoughts about drama, emotions and trading that have been rolling around in my head lately. I hope you find them helpful as you trade in the current market environment!
1) Most folks seem to be addicted to some form of drama. In the stock market, drama usually determines what most investors do and when they do it.
2) Money and fear -- often expressed as anger -- are usually involved in the ever-evolving drama.
3) On a global scale, the current major dramas that affect us all involve the world economy, politics, violence and geological events.
4) Emotions will continue to rise and fall in correlation with the drama.
5) The majority of investors and traders base their buy-and-sell decisions on emotions. Because of this, they tend to get in and out of the market at the wrong time.
6) There is usually very little we can do individually to change any of the above. However, we can use this information to make intelligent trading decisions and take advantage of the roller-coaster price movement that is caused by the drama.
Trade well!
- Thomas Sutton, Editor
Stocks Covered Today Stock Splits
Quick List
Stock 11/16 11/16 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
------ -------- -------- -------- -------- --------------- --------
CSV 21.40 -0.31 20.46 1.7/0.85 1.44
KRT 21.11 0.09 21.62 20.33 1.29/0.65 1.14
INBX 21.01 0.73 21.43 19.02 2.41/1.21 2.28
EVBG 20.12 -0.69 19.29 1.64/0.82 1.4
TCX 20.89 -0.23 21.44 19.98 1.46/0.73 2.18
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
Stocks showed a mixed performance on Thursday as the enthusiasm following recent inflation reports seemed to wane. The S&P 500 Index (SPX) and Nasdaq Composite (COMP) managed slight gains, while the Dow Jones Industrial Average (DJI) experienced its first loss in five days. Walmart's (WMT) comments expressing concerns about consumer spending, coupled with disappointing labor market data, contributed to the subdued market sentiment.
The market had enjoyed two consecutive days of solid gains following government inflation data, which indicated that the Federal Reserve's proactive interest rate hikes had effectively controlled prices. However, Walmart's quarterly earnings report on Thursday revealed cautionary remarks about weakening customer spending trends in late October. John David Rainey, Chief Financial Officer, stated that certain trends prompted a reassessment of consumer health. Walmart's shares, a Dow component, declined by almost 8%, retracting from a record high the day before.
Additionally, a report indicating a surge in jobless claims to a three-month high raised concerns that the Fed's aggressive rate stance might extend beyond inflation control and potentially impact the economy negatively. Walmart's commentary weighed on the retail sector, and energy also lagged as crude oil futures dropped by 5% to a four-month low of less than $73 a barrel, influenced in part by record U.S. crude production boosting supply.
Thursday's trading suggested a stock market taking a breather, possibly transitioning into a consolidation phase after the S&P 500 rallied up to 10% from its late-October lows. The index closed above the key chart level of 4,500 for the second consecutive day. While market technicals still exhibit a bullish tilt, the catalyst needed to decisively push the S&P 500 above 4,500 remains uncertain.
Nov 13, 2023 Nov 14, 2023
-------------------- --------------------
Dow 34,337.87 54.77 34,827.70 489.83
Nasdaq 13,767.74 -30.36 14,094.38 326.64
S&P 500 4,411.55 -3.69 4,495.70 84.15
NYSE Volume 3.33B 4.71B
NYSE Advancers 1,403 2,667
NYSE Decliners 1,456 254
Nasdaq Volume 4.36B 5.35B
Nasdaq Advancers 2,086 3,384
Nasdaq Decliners 2,164 953
New Highs/Lows
11/07 11/08 11/09 11/10 11/13 11/14
--------------------------------------------
NYSE New Highs 30 38 44 44 51 120
NYSE New Lows 54 66 92 105 78 20
Nasdaq New Highs 48 50 46 60 65 139
Nasdaq New Lows 145 205 319 353 246 162
Stocks Covered Today Stock Splits
TRADER'S TIP: "Trading vs. Gambling"
The biggest difference between trading and gambling is that gamblers focus more attention on favorable outcomes while traders focus more attention on losing outcomes. As a result, gamblers end up losing big while traders avoid it.
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 - 4495.70 November 14, 2023
52-Week High: 4607.07
52-Week Low: 3764.49
Daily Trend: UP
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 4540.58
Resistance 2: 4466.49
Resistance 1: 4440.86
Pivot: 4392.40
Support 1: 4366.77
Support 2: 4318.31
Support 3: 4244.22
NASDAQ Composite - 14094.38 November 14, 2023
52-Week High: 14446.55
52-Week Low: 10207.47
Daily Trend: UP
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 14411.95
Resistance 2: 14045.41
Resistance 1: 13921.76
Pivot: 13678.87
Support 1: 13555.22
Support 2: 13312.33
Support 3: 12945.79
Dow Industrials - 34827.70 November 14, 2023
52-Week High: 35679.13
52-Week Low: 31429.82
Daily Trend: UP
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 35052.25
Resistance 2: 34601.66
Resistance 1: 34442.38
Pivot: 34151.07
Support 1: 33991.79
Support 2: 33700.48
Support 3: 33249.89
Stocks Covered Today Stock Splits
Market Calendar
ECONOMIC REPORTS AND EVENTS (all times are Eastern): MONDAY, NOV. 13 2:00 pm Monthly U.S. federal budget TUESDAY, NOV. 14 6:00 am NFIB optimism index 8:30 am Consumer price index 8:30 am Core CPI 8:30 am CPI year over year 8:30 am Core CPI year over year 12:45 pm Chicago Fed President Austan Goolsbee speaks WEDNESDAY, NOV. 15 8:30 am Producer price index Oct. 8"30 am Core PPI 8:30 am PPI year over year 8:30 am Core PPI year over year 8:30 am U.S. retail sales 8:30 am Retail sales minus autos 8:30 am Empire State manufacturing survey 10:00 am Business inventories THURSDAY, NOV. 16 8:30 am Initial jobless claims 8:30 am Import price index 8:30 am Import price index minus fuel 8:30 am Philadelphia Fed manufacturing survey 9:15 am Industrial production 9:15 am Capacity utilization 9:25 am New York Fed President John Williams speaks 10:00 am Home builder confidence index FRIDAY, NOV. 17 8:30 am Housing starts 8:30 am Building permits 9:45 am Chicago Fed President Goolsbee speaks 10:00 am San Francisco Fed President Daly speaks 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 Primary Purpose Of Charts"
As stocks move, the resulting price action leaves footprints in the sand. These footprints are recorded on the price charts - valuable tools for traders. The primary purpose of charts is to identify the trend along with important support & resistance levels of a stock or market.
For more on the basics of charting, go to: http://www.rightline.net/education/charting.html
Stocks Covered in This Issue
CONSUMER CYCLICAL SECTOR
Carriage Services, Inc. (CSV: Consumer Cyclical/Personal Services) - BEARISH U-TURN. Stocks stuck in a downtrend like CSV tend to bounce downhill rather than slide lower in a straight line. After interacting with a moving average resistance level on Thursday, CSV is poised to drop again. To take advantage of this setup, prepare to SELL shares short at 20.46. As usual, follow your entry with a trailing stop. A 1.7 stop will fit CSV's current price range. Tighten it to 0.85 on a 1.44 gainer. Earnings Report Date: N/A. Beta: 0.92. Market-Cap: 320.604M. Optionable.
Karat Packaging Inc. (KRT: Consumer Cyclical/Packaging & Containers) - SQUEEZE PLAY. KRT traders on both sides of the fence are now locked in a head-to-head shootout. Thursday's price range was the narrowest in over a week, as neither Bears or Bulls have been able to clearly gain the upper hand. This gives us an opportunity to catch the next directional move with little risk of loss. To do this we'll place both a long and a short trigger with a BUY at 21.62 and a SELL short trigger at 20.33. When one of the orders is filled, cancel the remaining order and enter a 1.29 trailing stop. When you've reached a 1.14 paper profit, tighten the stop to 0.65. KRT closed at 21.11 on Thursday. Earnings Report Date: N/A. Beta: 0.98. Market-Cap: 421.449M. Not Optionable.
HEALTHCARE SECTOR
Inhibrx, Inc. (INBX: Healthcare/Biotechnology) - 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. INBX found itself in this condition on Thursday 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 21.43 and a SELL short trigger at 19.02. When INBX moves outside of Thursday's range, one of the orders will be filled. Once you hold a position of shares, cancel the unfilled order and place a 2.41 trailing stop. After you've got a 2.28 profit, tighten the stop to 1.21. INBX closed at 21.01 on Thursday. Earnings Report Date: N/A. Beta: 2.72. Market-Cap: 993.578M. Optionable.
TECHNOLOGY SECTOR
Everbridge, Inc. (EVBG: Technology/Software - Application) - 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 EVBG which met our setup requirements on Thursday. The SELL short trigger for this trade is set at 19.29, and the trailing stop is sized at 1.64. Reset the stop to 0.82 upon getting a 1.4 point gain. EVBG closed Thursday at 20.12. Earnings Report Date: N/A. Beta: 0.84. Market-Cap: 826.31M. Optionable.
Tucows Inc. (TCX: Technology/Software - Infrastructure) - SQUEEZE PLAY. TCX shareholders know what it feels like to be squeezed. Thursday's slim price range reveals uncertainty on both sides of the table, a situation which often resolves itself by either Bears or Bulls quickly gaining a clear advantage. The question is "who will win?" Near-term market action tell us whether we should sell short or we should buy shares instead. TCX closed Thursday at 20.89. The plan is to enter in the right direction by placing a BUY trigger at 21.44 and a SELL short trigger at 19.98. Once TCX establishes direction, place your triggered order. As soon as you are in the trade, place a trailing stop in the amount of 1.46. After you've collected a 2.18 profit, tighten the stop to 0.73. Earnings Report Date: Nov 21, 2023. Beta: 0.86. Market-Cap: 227.601M. 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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