November 9, 2023 - The RightLine Report
Notes From The Editor
Are you a morning person? While at first glance that question might not seem to have much to do with the market, it's actually an important factor in many traders' daily workload.
If you're anything like me, you'd rather stay in bed well past sunrise and wake up just in time for an early lunch. Alas, the demands of the market mean that committed short-term traders often need to be ready to roll by the 9:30 EST opening bell. For those in the Mountain or West Coast regions, that's quite an early rise.
The specific way you prepare for the market has a lot to do with your ability to function in the morning. Game-planning for the next session is a crucial step; without the tension and intensity of a "live" market, it's much easier to sit back and analyze from an unbiased and relaxed perspective.
A large amount of this game-planning can be carried out in the afternoon or evening before the next trading day. Once a routine is established, this can easily be taken care of in 10-15 minutes.
The first thing I like to do is check out the RightLine Earnings Calendar for a list of the next day's quarterly announcements. This is especially important during earnings season, when there are dozens of reports every day.
Make a note of any major companies that are announcing; they might have a big impact on their sector, or even the overall market.
The second step is to run through a list of possible trades that you might have identified earlier in the week. Scan through the applicable charts, noting which ones are nearing possible entry points. Also be sure to filter out potential set-ups that have upcoming earnings announcements. Promising technicals can often be rendered meaningless by a strong reaction to earnings.
With that chart-reading out of the way, you're free to take some additional time the following morning to kick your brain into gear - or better yet, get a little extra sleep!
Traders who roll out of bed in time to conduct morning research have the advantage of being able to incorporate early developments and events into their preparation. In the half-hour before the opening bell, news is flying fast and furious. Some of those major earnings reports might have already been released, causing a reaction in pre- market trading. Economic reports also play a big role in the first few hours of market action.
In the next RightLine Report we'll take a look at other timing issues, including market tendencies during different times of the day. Becoming familiar with these loose patterns takes some of the guesswork out of determining the market's direction. 'Til then...
Kent Barton
Senior Analyst
Stocks Covered Today Stock Splits
Quick List
Stock 11/09 11/09 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
------ -------- -------- -------- -------- --------------- --------
VSCO 18.42 0.34 18.92 1.39/0.7 2.24
CHEF 23.19 -0.27 24.23 22.33 1.9/0.95 1.7
PKOH 24.26 -0.23 25.17 1.75/0.88 1.98
AMRC 22.72 1.01 23.41 21.33 2.08/1.04 3.56
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
On Thursday, US stocks experienced a significant decline, bringing their winning streaks to an end, due to a spike in Treasury yields following a weak 30-year bond auction, which put pressure on rate-sensitive stocks. The Nasdaq's nine-day win streak was snapped, as was the S&P 500's eight-day streak. The Russell 2000 rose last week, but this week has been a tough one for bulls, with falling stocks erasing much of the prior week's gains.
All eleven S&P sectors closed in the "red," with large caps joining the downside. The American Association of Individual Investors reported a sharp drop in bears, while China's exports contracted more than anticipated.
Oil prices bounced after hitting a low on Wednesday, but demand concerns have picked up, and China's CPI and PPI prices were disappointing. Gold prices rose, breaking a four-day losing streak, and natural gas futures slid to a two-week low.
The USA sold $24B in 30-year bonds at high yield, resulting in a significant pullback in bonds, causing yields to spike. The USD/dollar also bounced following the bond auction and pullback in stocks. Bitcoin hit 18-month highs just below $38,000.
Nov 8, 2023 Nov 9, 2023
-------------------- --------------------
Dow 34,112.27 -40.33 33,891.94 -220.33
Nasdaq 13,650.41 10.56 13,521.45 -128.97
S&P 500 4,382.78 4.40 4,347.35 -35.43
NYSE Volume 3.74B 3.91B
NYSE Advancers 1,200 754
NYSE Decliners 1,649 2,126
Nasdaq Volume 4.71B 5.33B
Nasdaq Advancers 1,609 1,076
Nasdaq Decliners 2,647 3,148
New Highs/Lows
11/02 11/03 11/06 11/07 11/08 11/09
--------------------------------------------
NYSE New Highs 66 82 36 30 38 44
NYSE New Lows 55 18 24 54 66 92
Nasdaq New Highs 43 63 45 48 50 46
Nasdaq New Lows 161 91 112 145 205 319
Stocks Covered Today Stock Splits
TRADER'S TIP: "What Is A Warrant?"
A warrant is a certificate entitling the holder to buy a specific number of shares at a specific price, usually above the current market price at the time of issuance, for an extended period anywhere from a few years to forever. Corporations often bundle warrants with another class of security - such as preferred stock - to enhance the marketability of the other class. Warrants are like call options, but with much longer time spans - sometimes years.
Warrants are offered by corporations, while exchange-traded call options are not issued by firms. If the price of the security rises to above that of the warrant's exercise price, then the investor can buy the security at the warrant's exercise price and resell it for a profit. Otherwise, the warrant will simply expire or remain unused. Warrants are listed on options exchanges and trade independently of the security with which it was issued.
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 - 4347.35 November 9, 2023
52-Week High: 4607.07
52-Week Low: 3744.22
Daily Trend: UP
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 4769.66
Resistance 2: 4528.98
Resistance 1: 4443.66
Pivot: 4288.30
Support 1: 4202.98
Support 2: 4047.62
Support 3: 3806.93
NASDAQ Composite - 13521.45 November 9, 2023
52-Week High: 14446.55
52-Week Low: 10207.47
Daily Trend: UP
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 14887.48
Resistance 2: 14058.76
Resistance 1: 13768.52
Pivot: 13230.04
Support 1: 12939.80
Support 2: 12401.32
Support 3: 11572.59
Dow Industrials - 33891.94 November 9, 2023
52-Week High: 35679.13
52-Week Low: 31429.82
Daily Trend: UP
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 36839.67
Resistance 2: 35213.58
Resistance 1: 34637.45
Pivot: 33587.49
Support 1: 33011.36
Support 2: 31961.40
Support 3: 30335.31
Stocks Covered Today Stock Splits
Market Calendar
ECONOMIC REPORTS AND EVENTS (all times are Eastern): MONDAY, NOV. 6 11:00 am Fed Gov. Cook speaks 2:00 pm Federal Reserve senior loan survey TUESDAY, NOV. 7 7:30 am Minneapolis Fed President Kashkari TV appearance 8:00 am Chicago Fed President Goolsbee TV appearance 8:30 am U.S. trade deficit 9:15 am Fed Vice Chair for Supervision Barr speaks 10:00 am Fed Gov. Waller speaks 1:30 pm Fed Gov. Michelle Bowman speaks 3:00 pm Consumer credit WEDNESDAY, NOV. 8 5:15 am Fed Gov. Cook speaks 9:15 am Fed Chair Powell delivers opening remarks 10:00 am Wholesale inventories 2:00 pm Fed Vice Chair for Supervision Barr speaks 4:45 pm Fed Vice Chair Jefferson speaks THURSDAY, NOV. 9 8:30 am Initial jobless claims 2:00 pm Fed Chair Jerome Powell on panel at IMF 8:40 pm Philadelphia Fed President Patrick Harker speaks FRIDAY, NOV 10 7:30 am Dallas Fed President Lorie Logan speaks 9:00 am Atlanta Fed President Raphael Bostic speaks 10:00 am Consumer sentiment (prelim) 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: "More on Bases and Consolidations"
Rule of thumb - the longer the sideways action, the bigger the move when price does finally break out in one direction or the other.
Stocks Covered in This Issue
CONSUMER CYCLICAL SECTOR
Victoria's Secret & Co. (VSCO: Consumer Cyclical/Apparel Retail) - BULLISH BOUNCE. If you are looking for another bouncer with profits in mind, VSCO fits the bill. Shares have been in retreat-mode lately, but now this stock is in the process of bouncing from support. Currently priced at 18.42, plan to buy shares at 18.92 and use a 1.39 trailing stop. Tighten the stop to 0.7 on a 2.24 gain. Earnings Report Date: Nov 29, 2023. Beta: 2.00. Market-Cap: 1.423B. Optionable.
CONSUMER DEFENSIVE SECTOR
The Chefs' Warehouse, Inc. (CHEF: Consumer Defensive/Food Distribution) - 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 CHEF. A move to the upside will trigger our BUY entry at 24.23, while a drop to 22.33 will trigger our SELL short entry. Follow your position with a 1.9 trailing stop. Tighten the stop to 0.95 once you have a 1.7 gain. CHEF closed Thursday at 23.19. Earnings Report Date: N/A. Beta: 1.99. Market-Cap: 919.836M. Optionable.
INDUSTRIALS SECTOR
Park-Ohio Holdings Corp. (PKOH: Industrials/Specialty Industrial Machinery) - NEW HIGH DIP. Thursday's price action is telling us that PKOH is preparing to move back up to the 52-week high that was set just a few days ago. Our BUY trigger at 25.17 is ready to take advantage of a likely bounce from the current support level. Once your order is filled, enter a trailing stop of 1.75. Resize the stop to 0.88 after you reach a 1.98 profit. Earnings Report Date: N/A. Beta: 1.25. Market-Cap: 317.522M. Optionable.
Ameresco, Inc. (AMRC: Industrials/Engineering & Construction) - SQUEEZE PLAY. AMRC is caught in a dilemma. The stock's compressed price range on Thursday 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. AMRC is now at 22.72. We can capture price action either way by placing a BUY trigger at 23.41 and a SELL short trigger at 21.33. Once AMRC 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 2.08. When you acquire a 3.56 profit, tighten the stop to 1.04. Earnings Report Date: N/A. Beta: 1.53. Market-Cap: 1.187B. 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.
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