Notes From The Editor

The market can be very impulsive at times, and every trader feels the g-forces when stocks choose to mimic roller coasters. Here are a few suggestions that will help you stay on track no matter what route the market decides to take ...

- Check Your Emotions. The market is much more powerful than any individual. Though you have no control over what it does, you do have control over how you respond to its actions. Getting emotional when the market goes down doesn't make it go back up. On the other hand, the stress could cause you to make unwise decisions. Avoid this sort of self-sabotage. Remember - although your actions won't change the market, they will determine how much money you make.

- Be Sure Of Your Time Horizon. Most people buy stocks without first considering the time frame that suits them best. Are your plans short- term or long-term? It makes a big difference. A teenager that opens her first trading account has a much different time horizon than a sixty-five year old that plans to retire next year. Before entering a position, always consider which time frame will best serve your needs.

- Use Risk Management. Losing trades are a fact of life. Applying risk control tactics will quickly eliminate losers and insure they don't hurt you. Your advanced winners can provide the gains to offset any minor losses AND leave you with a good profit. You also have the option to stand aside when nothing seems to work. Just bear in mind that while the sidelines offer a temporary safe refuge, you have to be in the market to make money.

- Choose Your Attitude. Success in the stock market requires more than just a proven trading strategy. Winning is a reflection of your state of mind. Never let the negative attitude of others cause you unnecessary grief. Take action to dissolve fear and pave the way to a prosperous future.

Trade well!

- Thomas Sutton, Editor

Quick List

    
Stock     11/17     11/17      Buy      Short   Trailing Stops     Gain 
Symbol    Price      +/-      Entry     Entry   Initial/Tighten   Amount 
------  --------  --------  --------  --------  ---------------  --------

CWH       21.59      0.70     21.93     20.42        1.51/0.76      1.96
COST     577.15     -1.43    587.53                30.89/15.45      18.3
ARVN      20.92      0.12     21.77     19.97          1.8/0.9      1.96
RCKT      21.95      0.60     22.51     20.68        1.83/0.92      1.66
CAMT      61.51     -0.24     62.59                  4.63/2.32      5.78

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.

Market Summary

Friday was one of the calmest days on Wall Street in a while, characterized by choppy movements, ultimately closing slightly higher. Investors closely observed Treasury yields, which hit a two-month low earlier in the day, reinforcing the belief that the Fed has completed its rate hikes in this extended multi-year cycle.

The focal point of the week was the inflation data, with the CPI and PPI figures on Tuesday and Wednesday setting the tone. Both sets of data revealed a slowdown in prices, coming in below economists' estimates. This triggered a surge in stocks, especially in interest rate-sensitive sectors that had been impacted by rising yields. Sectors relying on financing or lending for their business, such as housing, solar, and biotech, also experienced significant gains. Small caps took the spotlight from Tuesday, with a 5% increase following the release of the CPI numbers, ending the week with an 8% gain.

Over the past two weeks, there has been robust buying interest. Goldman Sachs reported that Commodity Trading Advisors (CTAs) bought a record $70 billion in US stocks in the last 10 days, the largest 10-day buying spree on record according to Goldman's data going back to 2016. Goldman also noted a substantial increase in net buying from "long-only" investors since the beginning of November, representing a 40% increase over the same period last year. This buying trend coincided with a decline in Treasury yields and a softer dollar.

While macroeconomic factors continue to play a significant role, another major theme this week was the retail sector. Several earnings reports from retailers made headlines. The sector initially rallied with positive results from TGT and Macy's early in the week, dipped mid-week as WMT didn't match the beat, particularly affecting discount retail names at 52-week highs. Apparel retail rebounded Friday after GPS reported favorable results, and there are expectations for significant apparel earnings next week. ROST's positive results in off-price retail contributed to bullish movement, while warehouse stocks had a mixed performance following BJ's sales miss and guidance.

With Friday's gains, the S&P has closed up in 13 of the last 15 sessions. Even the one red session among them saw a minimal decline of less than 0.2%, underscoring the broad-based and resilient nature of the rally as the market approaches Thanksgiving.

                      Friday                 On The Week      
                  --------------------   --------------------
Dow                 34,947.28     1.81      +664.18     1.94%
Nasdaq              14,125.48    11.81      +327.37     2.37%
S&P 500              4,514.02     5.78       +98.78     2.24%

NYSE Volume                      3.79B                       
NYSE Advancers                   1,996                       
NYSE Decliners                     841                       

Nasdaq Volume                    4.42B                       
Nasdaq Advancers                 2,887                       
Nasdaq Decliners                 1,354                       

                                 New Highs/Lows

                   11/10  11/13  11/14  11/15  11/16  11/17
                 --------------------------------------------
NYSE New Highs        44     51    120     92     46     59
NYSE New Lows        105     78     20      9     26     14
Nasdaq New Highs      60     65    139    139     49     71
Nasdaq New Lows      353    246    162    114    131    103
   

TRADER'S TIP: "Extreme Bids"

When the market is closed, level II quotes will often show an extremely low and extremely high bid far from the current offer. Although neither bid are likely to be filled, they are usually there because market makers are required to provide a two-sided quote. By entering a bid and offer far away from the National Best Bid Offer, it ensures they won't get filled. This is one way market makers satisfy the two-sided quote rule without being active in the stock. Another way to view it is that the market maker has no customer orders for that particular stock.

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 - 4514.02 November 17, 2023

52-Week High: 4607.07
52-Week Low: 3764.49
Daily Trend: UP
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 4731.03
Resistance 2: 4603.68
Resistance 1: 4558.85
Pivot: 4476.33
Support 1: 4431.50
Support 2: 4348.98
Support 3: 4221.63

NASDAQ Composite - 14125.48 November 17, 2023

52-Week High: 14446.55
52-Week Low: 10207.47
Daily Trend: UP
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 15015.70
Resistance 2: 14509.12
Resistance 1: 14317.29
Pivot: 14002.54
Support 1: 13810.71
Support 2: 13495.96
Support 3: 12989.38
        
Dow Industrials - 34947.28 November 17, 2023

52-Week High: 35679.13
52-Week Low: 31429.82
Daily Trend: UP
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 36425.31
Resistance 2: 35580.02
Resistance 1: 35263.65
Pivot: 34734.73
Support 1: 34418.36
Support 2: 33889.44
Support 3: 33044.15
 

Market Calendar

ECONOMIC REPORTS AND EVENTS (all times are Eastern):    

MONDAY, NOV. 20					
10:00 am	U.S. leading economic indicators
12:00 pm	Richmond Fed President Tom Barkin TV appearance
				
TUESDAY, NOV. 21					
10:00 am	Existing home sales0%
2:00 pm	Minutes of Fed's Oct. 31-Nov. 1 FOMC meeting
				
WEDNESDAY, NOV. 22					
8:30 am	Initial jobless claims	
8:30 am	Durable-goods orders	
8:30 am	Durable-goods minus transportation	
10:00 am	Consumer sentiment (final)	

THURSDAY, NOV. 23					
Thanksgiving holiday, none scheduled
				
FRIDAY, NOV. 24					
9:45 am	S&P flash U.S. services PMI	
9:45 am	S&P flash U.S. manufacturing PMI
For a chart of typical Up or Down market reactions to specific major US economic reports 
go to:  Economic Indicator Effects

TRADER'S TIP: "Paper Trading"

Simulated trading is helpful because it allows newcomers to learn and develop a certain degree of skill without putting real money into the market. However, this type of "virtual" experience is limited because it doesn't produce genuine emotional involvement. In fact there is a huge difference between the safety of imagined risk and the raw challenge of having to put cash - your cash - at risk. In the real world, emotional challenges due to routine losses usually influence a trader's attitude and decision-making process to a larger degree than ever expected.

Stocks Covered in This Issue

CONSUMER CYCLICAL SECTOR

Camping World Holdings, Inc. (CWH: Consumer Cyclical/Auto & Truck Dealerships) - SQUEEZE PLAY. Friday's trading session left CWH 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 21.93 and your SELL short trigger at 20.42. One of the orders will be triggered by upcoming price action. When your market order is filled, cancel the remaining trigger and enter a 1.51 trailing stop. Once you have a 1.96 profit, reduce the stop to 0.76. Earnings Report Date: N/A. Beta: 2.70. Market-Cap: 967.028M. Optionable.

CONSUMER DEFENSIVE SECTOR

Costco Wholesale Corporation (COST: Consumer Defensive/Discount Stores) - NEW HIGH DIP. After setting a recent new 52-week high, COST shares have since fallen from that peak as traders put some profits in the bank. Friday's intra-day bounce may very signal that the recent decline is over. Prepare for a continuation of this turnaround and "buy-the-dip" if COST reaches our BUY trigger set at 587.53. Follow your entry with a trailing stop of 30.89, and tighten to 15.45 on a 18.3 gain. COST closed Friday at 577.15. Earnings Report Date: Dec 14, 2023. Beta: 0.78. Market-Cap: 255.528B. Optionable.

HEALTHCARE SECTOR

Arvinas, Inc. (ARVN: Healthcare/Biotechnology) - SQUEEZE PLAY. The ticker for Friday's session shows ARVN is now stuck in a tight price band. With the cyclical contraction and expansion nature of volatility in force, we should see a new period of price expansion in the days ahead. To improve the odds of catching the next directional wave, place a BUY trigger at 21.77 and a SELL short trigger at 19.97. When ARVN starts moving out of its narrow range, your order will be triggered. Once you're in the trade, cancel the opposing trigger and set a 1.8 trailing stop. Upon reaching a 1.96 profit, resize the stop to 0.9. Earnings Report Date: N/A. Beta: 1.86. Market-Cap: 1.151B. Optionable.

Rocket Pharmaceuticals, Inc. (RCKT: Healthcare/Biotechnology) - SQUEEZE PLAY. RCKT 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 22.51 and a SELL short entry at 20.68. Once your trade is filled, enter a 1.83 trailing stop. Tighten it to 0.92 after a 1.66 gain. RCKT closed on Friday at 21.95. Earnings Report Date: N/A. Beta: 0.92. Market-Cap: 1.979B. Optionable.

TECHNOLOGY SECTOR

Camtek Ltd. (CAMT: Technology/Semiconductor Equipment & Materials) - NEW HIGH DIP. CAMT's upward price momentum produced a brand new 52-week high just a few sessions ago. Shares have been sliding downhill since reaching that point, but the bounce that took place during Friday's trading could be telling us the short-term decline is over. We need to confirm that sellers are exiting, so we'll wait for CAMT to move a bit higher before buying this stock. Set your BUY trigger at 62.59, and then enter a trailing stop of 4.63. Tighten the stop to 2.32 when you accumulate a 5.78-point gain. CAMT finished the Friday session at 61.51. Earnings Report Date: Feb 14, 2024. Beta: 1.45. Market-Cap: 2.761B. 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.

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.

Trader's Corner

"Flipping Stocks"

Flipping is a trading tactic that you can use to make sizable gains in a short amount of time. Keep in mind that there are some potential risks in flipping stocks, but if you follow a few simple guidelines the technique can work very well.

To "flip" a stock, you enter a position near the close and exit at the open of the next session - with the purpose of making a quick profit. This tactic works equally well from either the long or the short side, but in this article we'll focus primarily on the long (buy) side.

The risk is that if bad news hits the stock or the market overnight, you can incur a loss. However, if the market is working well with a large number of stocks finishing the day near their intra-day highs, the odds are in your favor that you will capture a nice profit by holding the stock until the open of the next session.

There are a couple of rules to bear in mind if you decide to use this tactic. However, before we look at the "two rules of flipping," here is a bit of background that shows why playing flip trades can be very profitable.

Studies by Moore Research Center show that when markets close in the upper 20% of their price range for the day, they tend to move higher the next session. For example, researchers looked at ten years of S&P 500 data and found that when the 20% level was met, prices rose above the previous day's high 80% of the time.

Traders and active investors can use this information as part of their planning routine when deciding whether to hold onto current positions, exit, or enter a new one for a quick flip trade. A top 20% market finish into the closing bell could merit holding a position longer than originally planned, whereas a close below that level might prompt a quick sale to lock in profits.

The studies by Moore Research also indicated that even though prices rose higher the next day 80% of the time, they only closed higher about 50% of the time - so it's a good idea to keep a tight stop on these "flippers!"

Okay, back to the rules.

The Two Rules of Flipping

1. Generally you want the market to be on the strong side. You will also want to select stocks that are finishing strong, within 20% of the session high. This is pretty easy to see, if you are watching the market near the close. Ideally you want your stocks to be in a sector that closes in the top 20% of its range with several strong stocks in the group finishing at their highs. There numerous indices for almost every sector, so be sure to monitor the index for stocks that you intend to enter.

2. Rule number two says, "If you bought a stock with the intention of flipping it, then flip it!" Lots of traders make the mistake of thinking that the stock will keep flying and they might miss the move if they sell. However, unless the stock you bought to flip has significant news overnight, most likely the stock will gap open and then sell off a bit as traders sell the gap. This play is termed as "fading the gap" - trading opposite of the move.

When flipping, you have to be disciplined in planning your trade and sticking with your plan. You can't get greedy if you want to "flip" successfully. One reason flipping a stock works so well is because the world tends to follow the US markets. When the US markets finish on the strong side, other foreign markets will normally have positive moves overnight. As a result, the next day we will often see the futures up before the open. This prompts many retail investors and amateur traders who don't want to miss the move to jump in with buy orders at the open, just as flippers are selling.

This is obviously a very short term trading tactic that is best suited for traders who have access to the markets at the close of the current session, and the open of the following session. Keep in mind that flipping has its own set of risks, but if you stick to the rules and use good trading discipline, it can be very profitable.

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

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