October 29, 2022 - The RightLine Report ********************************** NOTES FROM THE EDITOR **********************************
Ask the question "What is a stock trader's main goal?" and you'll probably hear something like "To make a lot of money!" It surprises many people to find that the major goal of a truly successful trader isn't to make money, but to make the best trades possible.
*********************************** "QUICK LIST" *********************************** Stock 10/28 10/28 Buy Short Trailing Stops Gain Symbol Price +/- Entry Entry Initial/Tighten Amount ------ -------- -------- -------- -------- --------------- -------- DICE 34.52 0.74 35.52 3.44/1.72 5.86 OSH 20.48 0.52 20.81 19.01 1.8/0.9 2.92 OC 84.61 1.16 86.14 5.7/2.85 5.84 ZI 45.18 -0.93 46.01 3.56/1.78 4.32 EBIX 20.40 0.59 20.76 19.24 1.52/0.76 2.12 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/ ***************************** MARKET SUMMARY ***************************** US stocks were sharply higher on Friday, as earnings and economic news encouraged bulls to take on new positions ahead of the weekend. On the economic front, pending home sales declined, consumer sentiment was revised higher, personal income and spending were upbeat, and third quarter employment costs remained high. In equities, Apple (AAPL $156) topped profit expectations on weak iPhone revenues, while Amazon (AMZN $103) earnings were also above forecasts, but revenues were below par and the company released a disappointing outlook. Chevron (CVX $180), Intel (INTC $29) and Exxon Mobil (XOM $111) all beat analysts' predictions. Treasury yields and the USD/dollar advanced higher, gold and oil prices were lower. Friday On The Week -------------------- -------------------- Dow 32,861.80 828.52 +1779.24 5.72% Nasdaq 11,102.45 309.78 +242.73 2.24% S&P 500 3,901.06 93.76 +148.31 3.95% NYSE Volume 4.47B NYSE Advancers 2,420 NYSE Decliners 760 Nasdaq Volume 4.76B Nasdaq Advancers 3,160 Nasdaq Decliners 1,477 New Highs/Lows 10/21 10/24 10/25 10/26 10/27 10/28 -------------------------------------------- NYSE New Highs 40 66 70 82 76 89 NYSE New Lows 548 333 114 97 128 113 Nasdaq New Highs 69 68 105 132 109 121 Nasdaq New Lows 454 443 188 144 183 197 *********************************** TRADER'S TIP: *********************************** TRADER'S TIP: "Husband and Wife" It's okay to fall in love with a stock, but never marry it. Keeping an objective view of a trade is essential if you want to be able to exit without 'psychological' hang-ups. Do not become overly committed to a stock - the cost can be way too high. ************************** THE TECHNICAL ANALYST ************************** 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 - 3901.06 October 28, 2022 52-Week High: 4818.62 52-Week Low: 3491.58 Daily Trend: UP Weekly trend: DOWN Weekly Pivot Levels Resistance 3: 4176.91 Resistance 2: 4013.14 Resistance 1: 3957.10 Pivot: 3849.37 Support 1: 3793.33 Support 2: 3685.60 Support 3: 3521.83 https://www.prorightline.com/rlch/102822SPX.jpg--ECONOMIC REPORTS AND EVENTS (all times are Eastern): Monday, October 31, 2022: 31-Oct 9:45 am Chicago PMI Tuesday, November 01, 2022: 01-Nov 9:45 am 01-Nov 10 am ISM manufacturing index 01-Nov 10 am Jobs openings 01-Nov 10 am Quits 01-Nov 10 am Construction spending 01-Nov Varies Motor vehicle sales (SAAR) Wednesday, November 02, 2022: 02-Nov 8:15 am ADP employment report (level change) 02-Nov 10 am Rental vacancy rate 02-Nov 2 pm FOMC announcement 02-Nov 2:30 pm Fed Chair Jerome Powell press conference Thursday, November 03, 2022: 03-Nov 8:30 am Initial jobless claims 03-Nov 8:30 am Continuing jobless claims 03-Nov 8:30 am Foreign trade deficit 03-Nov 8:30 am Productivity (SAAR) 03-Nov 8:30 am Unit labor costs (SAAR) Friday, November 04, 2022: 04-Nov 8:30 am Nonfarm payrolls (level change) 04-Nov 8:30 am Unemployment rate 04-Nov 8:30 am Average hourly earnings 04-Nov 8:30 am Labor-force participation rate, ages 25-54 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/ *********************************** TRADER'S TIP: *********************************** TRADER'S TIP: "Fire Drill" At some time or another, every online trader will experience a "technical problem." Computers, Internet Service Providers, charting tools, data feeds, broker access - even the phone and electrical power can break down temporarily. These interruptions are inevitable, so you might as well plan for them. Arrange a backup for every aspect of your trading process, then conduct a "fire drill" so you will know exactly what to do when the real disruptions come. You'll certainly be glad you did! *********************************** STOCKS COVERED IN THIS ISSUE *********************************** HEALTHCARE SECTOR DICE Therapeutics, Inc. (DICE: Healthcare/Biotechnology) - BULLISH BOUNCE. The charts for DICE show that despite the downward pressure from sellers recently, the weekly uptrend is still going strong. Buyers showed up again on Friday, resulting in the early stages of a rebound that started near moving average support. The resulting Bullish Bounce set-up offers a potential entry point for a long play. Set your trigger to BUY shares at 35.52, and follow your entry with a trailing stop of 3.44. Tighten it to 1.72 when a 5.86 profit is reached. DICE ended the latest session at 34.52. Earnings Report Date: N/A. Beta: N/A. Market-Cap: 1.603B. Optionable. Oak Street Health, Inc. (OSH: Healthcare/Medical Care Facilities) - SQUEEZE PLAY. OSH 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 20.81 and a SELL short entry at 19.01. Once your trade is filled, enter a 1.8 trailing stop. Tighten it to 0.9 after a 2.92 gain. OSH closed on Friday at 20.48. Earnings Report Date: Nov 07, 2022. Beta: 2.71. Market-Cap: 4.95B. Optionable. INDUSTRIALS SECTOR Owens Corning (OC: Industrials/Building Products & Equipment) - BULLISH BOUNCE. OC's positive weekly uptrend is still intact despite recent selling that has driven share prices lower. Price action on Friday shows that traders are aware of the moving average support zone now in play, and they are ready to consider buying again. A shift up from this point will attract even more buyers. The new buying should move OC back in step with the bullish weekly trend, so our BUY entry trigger is set at 86.14. Once you hold a position, trail a stop of 5.7. Tighten it to 2.85 on a 5.84 gain. OC closed at 84.61 on Friday. Earnings Report Date: N/A. Beta: N/A. Market-Cap: 7.907B. Optionable. TECHNOLOGY SECTOR ZoomInfo Technologies Inc. (ZI: Technology/Software-Application) - BULLISH BOUNCE. Positive price behavior near moving average support on Friday qualifies ZI for a Bullish Bounce setup. After several sessions of declining prices, ZI should soon begin trading in step with its established weekly uptrend. Tell your broker to BUY shares if ZI moves up to our entry trigger set at 46.01. You can also enter a 3.56 trailing stop, to be replaced with a 1.78 trailing stop when you obtain a 4.32 profit. ZI closed Friday at 45.18. Earnings Report Date: Nov 01, 2022. Beta: 1.32. Market-Cap: 18.228B. Optionable. Ebix, Inc. (EBIX: Technology/Software-Application) - SQUEEZE PLAY. Friday's trading session left EBIX 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 20.76 and your SELL short trigger at 19.24. One of the orders will be triggered by upcoming price action. When your market order is filled, cancel the remaining trigger and enter a 1.52 trailing stop. Once you have a 2.12 profit, reduce the stop to 0.76. Earnings Report Date: Nov 07, 2022. Beta: 2.62. Market-Cap: 630.462M. 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 *********************************** 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/ ********************************** TRADER'S CORNER ********************************** "Index and Sector Stocks" Want to trade the entire Nasdaq, Dow, or S&P 500 in one stock? Index stocks and sector stocks (formally known as ETFs, or Exchange Traded Funds) provide a convenient way to invest in ALL of the leading companies in a top index or industry. Similar to mutual funds, sector and index stocks provide access to a "basket" of stocks in an entire index or industry sector through a single transaction. Sector and index stocks trade just like any other stock and can be used for short-term or longer-term strategies. Short-term traders love them because they are very liquid, can easily be traded both long or short on margin, and tend to move closely with their related indices. For long-term investors, these stocks provide unique tax advantages, and unlike mutual funds there are no management fees. Just as "normal" stocks represent ownership in a publicly traded company, sector and index stocks signify ownership in a Unit Investment Trust, or UIT - a collection of securities (stocks for our purposes) bundled together in a trust. Due to the number of stocks in each group, sector and index stocks provide an element of safety through diversification, and are usually less volatile than the individual stocks they represent. They generally provide a lower-stress way to trade highly volatile markets. Sector stocks are represented by individual stock symbols - here are several examples: SPY - Formally named Standard & Poor's Depositary Receipts, SPDRs are commonly called "Spiders" and represent the basket of stocks in the S&P 500 (SPX). This was the first index stock and was created by the American Stock Exchange in January 1993. DIA - The Dow Industrial Average Model of New Depository Shares (DIAMONDS) represent the basket of 30 stocks in the DOW (DJX or INDU). QQQQ - Represents the stocks in the Nasdaq 100 (NDX). HOLDRS - HOLding Company Depositary ReceiptS represent the common stock of companies from a specific industry segment. Merrill Lynch launched HOLDRS for trading on the Amex stock exchange, which is now the NYSE MKT LLC Equities exchange. For more information on Merrill Lynch's current HOLDRS and the stocks represented by each one, go to the following link: https://www.holdrs.com/holdrs/main/index.asp?Action=Outstanding FFX - Fortune 500 index represents the companies in the Fortune 500. FEX - Fortune e-50 index represents the top 50 Internet economy companies. IShares Sector Funds provide investment vehicles similar to HOLDRS and are modeled after specific index funds based on the Russell 2000, Morgan Stanley Capital International (MSCI) Index Fund Series, S&P 500, and the DOW indices. IShares are the world's most extensive family of Exchange Traded Funds (ETFs). You can trade index and sector stocks exactly the same way you trade regular stocks through any brokerage. HOLDRS require a minimum purchase of 100 shares, but you can buy a single share of the other sector stocks. The lower volatility of sector stocks makes them relatively easy on the nerves to trade, but as with any trade, risk management is critical and stops must be used to protect against the market moving against a position. Good luck! Note: For more on Index and Sector Funds (ETFs) go to the following webpage: https://prorightline.com/education/etfs.html ====================================================================== Best of luck and have a Great Week! ********** If you prefer to receive this report in html with color and graphics, or have any questions, send us an email using our contact form at:https://prorightline.com/index.php/contact-us/ ====================================================================== 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. 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