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October 25, 2022 - The RightLine Report
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NOTES FROM THE EDITOR
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Almost all traders enjoy discussing different trading strategies and the merits of one stock or sector over another. However there is one important subject that rarely gets much attention - "discipline." The very thought of discipline often conjures up images of punishment and pain. Fortunately when it comes to trading, the word carries a different meaning.
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"QUICK LIST"
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Stock 10/25 10/25 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
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STNG 48.54 1.26 49.47 4.39/2.2 5.14
TNP 17.45 -0.09 18.11 1.6/0.8 1.84
PARR 23.06 0.06 23.66 22.08 1.58/0.79 1.8
TREE 22.45 0.88 23.12 20.63 2.49/1.25 3.78
JAMF 23.67 0.38 24.29 22.72 1.57/0.79 2.24
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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Stocks were higher on Tuesday despite reports showing a drop in consumer confidence and a larger decline in regional manufacturing than forecasted. In equities, earnings announcements were mixed as 3M Company (MMM $119) announced an upbeat profit surprise yet lowered guidance for the full year. General Electric (GE $72) missed earnings predictions and also lowered guidance, while Coca-Cola (KO $59) topped earnings estimates and raised its outlook. Oil prices and gold were higher, treasury yields and the USD/dollar finished the session lower. Oct 24, 2022 Oct 25, 2022
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Dow 31,499.62 417.06 31,836.74 337.12
Nasdaq 10,952.61 92.90 11,199.12 246.50
S&P 500 3,797.34 44.59 3,859.11 61.77
NYSE Volume 4.79B 4.87B
NYSE Advancers 1,835 2,731
NYSE Decliners 1,347 519
Nasdaq Volume 4.84B 5.18B
Nasdaq Advancers 2,333 3,636
Nasdaq Decliners 2,240 991
New Highs/Lows
10/18 10/19 10/20 10/21 10/24 10/25
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NYSE New Highs 40 33 37 40 66 70
NYSE New Lows 115 310 412 548 333 114
Nasdaq New Highs 76 53 72 69 68 105
Nasdaq New Lows 157 326 372 454 443 188
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TRADER'S TIP:
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TRADER'S TIP: "Earnings: Holding Through or Getting Back In" It's no secret that we believe in avoiding undue risk. Because earnings reports often end up surprising traders, we often suggest closing out positions before the company announces earnings. However, if a stock is moving in a solid trend (long or short) and earnings estimates support that trend, experienced traders will often elect to drastically reduce the number of shares in their position and hold them through the earnings announcement. In some cases traders jump back into the trade after the company reports better than expected earnings. This can be profitable at times, but don't chase the stock. If it has jumped more than 5% beyond your exit point, you're probably better off waiting for price to pull back to a moving average support level. **************************
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 - 3859.11 October 25, 2022 52-Week High: 4818.62 52-Week Low: 3491.58 Daily Trend: UP Weekly trend: DOWN Weekly Pivot Levels Resistance 3: 3966.34 Resistance 2: 3842.20 Resistance 1: 3797.47 Pivot: 3718.06 Support 1: 3673.33 Support 2: 3593.92 Support 3: 3469.78 https://www.prorightline.com/rlch/102522SPX.jpg--ECONOMIC REPORTS AND EVENTS (all times are Eastern): Monday, October 24, 2022: 24-Oct 8:30 am Chicago Fed national activity index 24-Oct 9:45 am 24-Oct 9:45 am Tuesday, October 25, 2022: 25-Oct 9 am 25-Oct 9 am FHFA U.S. home price index (SAAR) 25-Oct 10 am Consumer confidence index Wednesday, October 26, 2022: 26-Oct 8:30 am Trade in goods (advance) 26-Oct 10 am New home sales (SAAR) Thursday, October 27, 2022: 27-Oct 8:30 am Real gross domestic product, first estimate (SAAR) 27-Oct 8:30 am Real final sales to domestic purchasers, first estimate (SAAR) 27-Oct 8:30 am Initial jobless claims 27-Oct 8:30 am Continuing jobless claims 27-Oct 8:30 am Durable goods orders 27-Oct 8:30 am Core capital equipment orders Friday, October 28, 2022: 28-Oct 8:30 am Employment cost index (SAAR) 28-Oct 8:30 am PCE price index (SAAR) 28-Oct 8:30 am Core PCE price index (SAAR) 28-Oct 8:30 am PCE price index (12-month change) 28-Oct 8:30 am Core PCE price index (12-month change) 28-Oct 8:30 am Real disposable income (SAAR) 28-Oct 8:30 am Real consumer spending 28-Oct 10 am UMich consumer sentiment index (late) 28-Oct 10 am UMich consumer 5-year inflation expectations (late) 28-Oct 10 am Pending home sales index 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: "Learn As You Earn" Short term trading is a great teaching vehicle. Through repetition we quickly learn how to select the correct number of shares for each position, and how to control risk using stops. We also rapidly learn how to trade in harmony with the trend, and become adept at managing each trade on its own merits. ***********************************
STOCKS COVERED IN THIS ISSUE
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ENERGY SECTOR Scorpio Tankers Inc. (STNG: Energy/Oil & Gas Midstream) - NEW HIGH DIP. As a rule of thumb, outstanding stocks like STNG continue to perform well for extended periods of time. The recent pullback from a new 52-week high gives us a chance to enter a position without taking much risk. STNG's price behavior on Tuesday points to another move higher, so prepare to BUY shares at the trigger price of 49.47. Once in, follow the purchase with a 4.39 trailing stop. Change the stop to 2.2 upon gaining 5.14 points. STNG closed Tuesday at 48.54. Earnings Report Date: Nov 01, 2022. Beta: 0.46. Market-Cap: 2.866B. Optionable. Tsakos Energy Navigation Limited (TNP: Energy/Oil & Gas Midstream) - BULLISH BOUNCE. Another bullish bouncer, TNP appears ready to resume trading in an uptrend after recent selling forced the stock lower for several days. Tuesday's positive price action near Moving Average support says it's time to BUY shares if TNP reaches our entry trigger set at 18.11. Also place a 1.6 trailing stop which can be narrowed to 0.8 when you reach a 1.84 profit. TNP closed Tuesday at 17.45. Earnings Report Date: Dec 14, 2022. Beta: 0.07. Market-Cap: 510.421M. Optionable. Par Pacific Holdings, Inc. (PARR: Energy/Oil & Gas Refining & Marketing) - SQUEEZE PLAY. One interesting trait of price volatility is that it cycles back and forth through periods of expansion and contraction. Stocks that have recently seen their daily price range shift from an average or wide range to an extremely contracted state are ideal candidates for expansive price moves. In many cases the next move is relatively fast and covers a sizable amount of territory. To take advantage of these trades we use both a BUY and a SELL entry. This allows us to enter in whichever direction the breakout takes. In PARR's case we will enter a BUY should it reach the 23.66 level, or a SELL short trade if it drops to 22.08. As usual a trailing stop is essential, 1.58 which should be tightened to 0.79 on a 1.8 gain. PARR closed Tuesday at 23.06. Earnings Report Date: Nov 01, 2022. Beta: 1.96. Market-Cap: 1.388B. Optionable. FINANCIAL SERVICES SECTOR LendingTree, Inc. (TREE: Financial Services/Financial Conglomerates) - 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 TREE. A move to the upside will trigger our BUY entry at 23.12, while a drop to 20.63 will trigger our SELL short entry. Follow your position with a 2.49 trailing stop. Tighten the stop to 1.25 once you have a 3.78 gain. TREE closed Tuesday at 22.45. Earnings Report Date: Nov 03, 2022. Beta: 1.73. Market-Cap: 293.965M. Optionable. TECHNOLOGY SECTOR Jamf Holding Corp. (JAMF: Technology/Software-Application) - SQUEEZE PLAY. Trader indecision has put JAMF squarely in the center of a Bull versus Bear standoff. This tight spot should soon give way to a clear winner in the short-term, and we want to be in position for the move. To do that we've set a BUY entry at 24.29 and a SELL short entry at 22.72. Now it's up to JAMF to show us which entry will be filled. Once the trade is underway place a 1.57 trailing stop, which can be tightened to 0.79 after you achieve a 2.24 profit. JAMF closed on Tuesday at 23.67. Earnings Report Date: Nov 09, 2022. Beta: 0.60. Market-Cap: 2.857B. 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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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 To Unsubscribe, send an email to cs@prorightline.com or call 1-312-248-4241. |