October 24, 2023 - The RightLine Report
Notes From The Editor
The Mind of A Trader - Earnings Season Expectancy
The rising anticipation leading up to earnings report announcements always creates a reactive stock market environment. Traders are usually quick to sell at even the hint of a possible problem in a company's financial health. While this quarterly "quick-on-the-trigger" scene isn't necessarily a bad thing for trading stocks, it does mean that we have to manage each position with even more care than usual.
We're currently in the thick of it, so now is a good time to review your trading plan. Make sure you have an exit strategy and risk control elements in place for every trade. Though we can't always accurately predict what the market will do, we can protect ourselves during periods when risk is higher than normal. It's always a good move to prepare for the unexpected during earnings season.
Even this level of preparedness doesn't prevent all mistakes. Pros as well as rookies face the same challenges when it come to slip-ups. One of the biggest mistakes a trader can make is to not accept all market experiences - both good and bad - as valuable lessons.
Money is intoxicating, so it pays to keep a tight rein on our egos when things are going well. On the flip side, we shouldn't be too hard on ourselves when we get it wrong.
Instead of blaming yourself or others for goof-ups, put your energy into becoming aware of the reasons for the "mistakes." This way you can learn from them and consciously choose to assign a positive value to these experiences.
This makes it much more likely that you will recover the cost of any current "mistakes" in future trading sessions. After all, you will inevitably face similar situations in the days ahead.
One way to view mistakes is to consider them just another cost of doing business. This helps avoid inflicting psychological damage to ourselves and others - damage that can take a long time and a lot of energy to undo.
Trade well!
~ Thomas Sutton, Editor
Stocks Covered Today Stock Splits
Quick List
Stock 10/24 10/24 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
------ -------- -------- -------- -------- --------------- --------
NWS 22.26 0.37 22.69 1.41/0.71 0.94
ATNI 33.92 0.47 34.58 1.94/0.97 1.58
TNP 21.26 0.50 21.82 1.53/0.77 1.48
SYM 41.11 2.47 42.54 4.46/2.23 3.82
CRWD 182.82 3.74 186.58 12.96/6.48 11.76
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
US stocks had a strong day on Tuesday, ending the S&P 500's four-day losing streak and preventing its first five-day decline in over a year. The market received a boost from solid earnings results in the large-cap sector. Most S&P sectors performed well, except for energy, as strong earnings from several Dow Jones components (Verizon, 3M, Coca-Cola) lifted sentiment. The S&P 500 index continued to test its significant technical support/resistance level of 4,235, which represents the 200-day moving average (and it closed above it).
Investors were eagerly awaiting earnings reports from tech giants like Microsoft, Google's parent company Alphabet, Visa, and Texas Instruments, all of which were scheduled to report after the close. Wednesday will bring another wave of earnings releases from mega-cap stocks. Bitcoin prices surged, reaching new 18-month highs above $35,000, which benefited shares in the cryptocurrency space, including Coinbase, Marathon Digital Holdings, Riot Blockchain, and MicroStrategy, although the gains later receded.
However, not all stocks enjoyed positive outcomes, as several saw declines due to disappointing results and/or guidance, particularly in the financial services sector, including Aaron's, Synchrony Financial, TrueBlue, and TransUnion.
While Treasury yields remained steady, with the 10-year yield at 4.85%, the USD/dollar experienced a 0.7% increase, and oil prices fell by more than 2%. International headlines were relatively calm, and the naming of a new House speaker was still pending in Washington, D.C.
Oct 23, 2023 Oct 24, 2023
-------------------- --------------------
Dow 32,936.41 -190.87 33,141.38 204.97
Nasdaq 13,018.33 34.52 13,139.87 121.55
S&P 500 4,217.04 -7.12 4,247.68 30.64
NYSE Volume 3.78B 3.85B
NYSE Advancers 896 2,008
NYSE Decliners 1,983 872
Nasdaq Volume 4.68B 4.63B
Nasdaq Advancers 1,387 2,641
Nasdaq Decliners 2,876 1,572
New Highs/Lows
10/17 10/18 10/19 10/20 10/23 10/24
--------------------------------------------
NYSE New Highs 53 26 16 4 7 8
NYSE New Lows 140 257 355 401 454 198
Nasdaq New Highs 43 28 17 9 16 26
Nasdaq New Lows 190 303 471 533 640 347
Stocks Covered Today Stock Splits
TRADER'S TIP: "Making Decisions Builds Confidence"
Each time we enter or exit a trade we make a decision. Every decision we make causes us to grow - IF we give our experiences the value they deserve. However, if we short-change ourselves for not always making "perfect" choices and view our experiences as "mistakes" our confidence will go down instead of up. Just remember that trading conditions are rarely optimum, and we're always making decisions under less than ideal circumstances. Give yourself a break, knowing that only YOU can set the proper value for each experience you have. Be sure you make the right choice. Build your confidence and never value any trade or other experience as worthless.
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 - 4247.68 October 24, 2023
52-Week High: 4607.07
52-Week Low: 3698.15
Daily Trend: DOWN
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 4621.33
Resistance 2: 4450.79
Resistance 1: 4337.47
Pivot: 4280.25
Support 1: 4166.93
Support 2: 4109.71
Support 3: 3939.17
NASDAQ Composite - 13139.87 October 24, 2023
52-Week High: 14446.55
52-Week Low: 10207.47
Daily Trend: DOWN
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 14437.47
Resistance 2: 13812.65
Resistance 1: 13398.23
Pivot: 13187.83
Support 1: 12773.41
Support 2: 12563.01
Support 3: 11938.19
Dow Industrials - 33141.38 October 24, 2023
52-Week High: 35679.13
52-Week Low: 31423.53
Daily Trend: DOWN
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 35523.36
Resistance 2: 34493.85
Resistance 1: 33810.56
Pivot: 33464.34
Support 1: 32781.05
Support 2: 32434.83
Support 3: 31405.32
Stocks Covered Today Stock Splits
Market Calendar
ECONOMIC REPORTS AND EVENTS (all times are Eastern): MONDAY, OCT. 23 None scheduled TUESDAY, OCT. 24 9:00 am S&P Case-Shiller home price index (20 cities) 9:45 am S&P flash U.S. services PMI 9:45 am S&P flash U.S. manufacturing PMI WEDNESDAY, OCT. 25 10:00 am New home sales THURSDAY, OCT. 26 8:30 am GDP Q3 8:30 am Initial jobless claims 8:30 am Durable-goods orders 8:30 am Durable-goods minus transportation 8:30 am Advanced U.S. trade balance in goods 8:30 am Advanced retail inventories 8:30 am Advanced wholesale inventories 10:00 am Pending home sales FRIDAY, OCT. 27 8:30 am Personal income (nominal) 8:30 am Personal spending (nominal) 8:30 am PCE index] 8:30 am Core PCE index 8:30 am PCE (year-over-year) 8:30 am Core PCE (year-over-year) 10:00 am Consumer sentiment (final) 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: "Price Action Near Support And Resistance"
It pays to keep an eye on support and resitance lines. One of the best low-risk buy signals takes place when price dips below a significant support line, then comes back up and closes above it. In the same fashion, an excellent shorting opportunity is provided when price rises marginally above a clear resistance line, then reverses to close below it.
Stocks Covered in This Issue
COMMUNICATION SERVICES SECTOR
News Corporation (NWS: Communication Services/Entertainment) - BULLISH BOUNCE. Everyone familiar with price charts knows that a stock tends to bounce its way higher rather than move in a straight line. The lower levels of these short-term rebounds offer a safe and often early entry into stocks that are in the process of establishing longer-term uptrends. NWS's reaction to support on Tuesday created a Bullish Bounce setup with a BUY entry trigger at 22.69. Use a 1.41 trailing stop, which should work well with NWS's typical daily range. Tighten it to 0.71 on a 0.94 profit. NWS closed at 22.26 on Tuesday. Earnings Report Date: N/A. Beta: 1.37. Market-Cap: 12.389B. Optionable.
ATN International, Inc. (ATNI: Communication Services/Telecom Services) - BULLISH BOUNCE. Some people hear of a stock that's performing nicely and then buy it without any regard for timing the entry. This approach usually leaves money on the table, money that could just as well be added to profits. The Bullish Bounce setup provides a well timed entry and reduces exposure to risk by placing both the entry trigger and exit stop near the bottom of the bounce. We have an opportunity to use this approach with ATNI which met our setup criteria on Tuesday. The BUY trigger for this trade is at 34.58, and the trailing stop is sized at 1.94. Resize the stop to 0.97 upon collecting a 1.58 point gain. ATNI closed Tuesday at 33.92. Earnings Report Date: Oct 25, 2023. Beta: 0.44. Market-Cap: 529.213M. Optionable.
ENERGY SECTOR
Tsakos Energy Navigation Limited (TNP: Energy/Oil & Gas Midstream) - BULLISH BOUNCE. Among other strengths, the Bullish Bounce protects traders from buying a stock "at the top" of its current cycle. The entry into this setup always takes place in upward-moving stocks that have retreated a bit under normal conditions. Now sitting at 21.26, TNP is on our radar for a BUY entry at 21.82. If you purchase shares of TNP, be sure to also place a trailing stop of 1.53. Snug it up to 0.77 on a 1.48 gain. Earnings Report Date: Nov 20, 2023. Beta: 0.12. Market-Cap: 627.289M. Optionable.
INDUSTRIALS SECTOR
Symbotic Inc. (SYM: Industrials/Specialty Industrial Machinery) - BULLISH BOUNCE. Entering a position in the early stages of a bounce is great way to get on board an up-trending stock. The "Bullish Bounce" setup identifies probable candidates by evaluating the trading action that takes place near support levels. SYM's behavior on Tuesday could very well be a sign that a new bounce is underway. Place a BUY trigger at 42.54. In the event your trigger is met, also place a 4.46 trailing stop which can be trimmed down to 2.23 when you have a 3.82 profit. SYM closed Tuesday at 41.11. Earnings Report Date: N/A. Beta: 1.80. Market-Cap: 22.851B. Optionable.
TECHNOLOGY SECTOR
CrowdStrike Holdings, Inc. (CRWD: Technology/Software - Infrastructure) - NEW HIGH DIP. "Buy the dip" is usually good advice when applied to an up-trending stock. This is expecially true when a new 52-week high has recently made its mark on the charts. CRWD meets the setup requirements, so get ready to BUY if shares reach our trigger price of 186.58. Once you've confirmed that your order is filled, follow it with a 12.96 trailing stop which can be changed to 6.48 when you have a 11.76-point gain. CRWD closed Tuesday at 182.82. Earnings Report Date: Nov 27, 2023. Beta: 0.94. Market-Cap: 43.655B. 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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