October 6, 2022 - The RightLine Report 

 
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                      NOTES FROM THE EDITOR
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The Trader's Mind

When you think about it, trading can be a very un-instinctive activity. In order to be effective, we have to resist our natural "hard wired" inclinations on a regular basis. This involves more than just planning to use a particular method that brings structure to our intentions. We also have to follow through and take action, which means dealing with the powerful emotional forces that can sometimes get in the way.

Trading requires us to confront and overcome psychological barriers. Since doubt and fear constantly influence the markets, we have to remember that it's normal for us to sense them. Sensing doubt and fear isn't the same as being afraid. It's just a form of awareness ... the same type of awareness that pilots become accustomed to when they look out of the plane and see how high they are flying.

Okay, let's dig deeper for a minute. Since fear is a constant in the stock market, we can turn it to our advantage. How? By using it to become more capable and confident. Our confidence and ability grows quickly when we're exposed to reasonably stressful challenges on a regular basis. As our skills improve, so do our results. This simply means that being aware of the negative effect fear has on the market enables us to make better choices and take direct action to make more money trading. Remembering this concept lets us deal effectively with any fears in our trading environment.

Excessive hope - which I call "semi-desperate-wishful-thinking" - often intensifies fear. It almost always causes traders to hold onto positions much longer than they should. On the other hand, confidence that your carefully prepared exit strategy can keep a trade open long enough to develop into a winner will keep you on track ... even when fear and doubt are shouting "get out early!"

Confidence is an extremely powerful component of any winning strategy. Though it has a magical effect, it isn't magic. It is a natural byproduct of understanding the principles beneath your trading methods, and routinely putting them into action. Traders who do understand this and believe in what they are doing become unstoppable.

The temptation to quit isn't hard to overcome when we choose the right frame of mind. Giving up insures failure, while persistence does just the opposite. Realizing that each of these conflicting actions result from different attitudes allows us to select our point of view ... for maximum benefit.

When feeling hesitant about making choices, always remember the old saying "Good judgment comes from experience, and experience comes from bad judgment." Life continuously gives us opportunities to learn how to replace the bad with good and then the good with the even better. Change is inevitable, so we might as well choose the best routes to take along the journey. With this in mind, let's do our best to trade our best. And when we don't, let's make the best of it anyway.

Trade Well!

- Thomas Sutton, Editor 

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                           "QUICK LIST"
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Stock     10/06     10/06      Buy      Short   Trailing Stops     Gain 
Symbol    Price      +/-      Entry     Entry   Initial/Tighten   Amount 
------  --------  --------  --------  --------  ---------------  --------

FRG       26.56     -0.51               25.51        2.44/1.22      2.78
YETI      30.85     -0.34               29.82        2.48/1.24      3.18
QURE      20.21      0.09     20.75      19.2        1.55/0.78      1.98
VRDN      20.41     -0.16     21.04     19.68        1.36/0.68      2.58
ISEE      21.09      0.10     21.84     19.99        1.85/0.93      2.92


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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The major US stock indices were lower on Thursday as volatility in the bond and currency markets have become a source of concern for investors. Economic headlines included unemployment claims increasing a bit more than predicted, while traders look ahead to the September nonfarm payroll report scheduled for release on Friday. On the equities front, Costco Wholesale (COST $482) reported net sales were down from the previous month yet remain positive compared to the same period last year. In earnings news, Conagra (CAG $33) and Constellation Brands (STZ $233) traded lower although both companies beat quarterly earnings projections. Oil prices, gold, the USD/dollar and treasuries were all higher.


                       Oct 5, 2022            Oct 6, 2022    
                  --------------------   --------------------
Dow                 30,273.87   -42.45     29,926.94  -346.93
Nasdaq              11,148.64   -27.77     11,073.31   -75.33
S&P 500              3,783.28    -7.65      3,744.52   -38.76

NYSE Volume                       4.3B                  4.31B
NYSE Advancers                     974                  1,000
NYSE Decliners                   2,242                  2,204

Nasdaq Volume                    4.12B                  4.46B
Nasdaq Advancers                 1,719                  1,889
Nasdaq Decliners                 2,898                  2,691

                                 New Highs/Lows

                   09/29  09/30  10/03  10/04  10/05  10/06
                 --------------------------------------------
NYSE New Highs         8      4     17     30     32     28
NYSE New Lows        820    485    237     78    122    163
Nasdaq New Highs      19     38     56     67     59     41
Nasdaq New Lows      761    572    378    161    199    163

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                              TRADER'S TIP:  
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TRADER'S TIP: "Trading Twenty-four Seven?"

Smart traders pick their spots. You don't have to trade continuously, nor should you. Being prepared for an opportunity means knowing about it in advance, which means staying informed - even when you aren't holding a position. 
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                         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 - 3744.52 October 6, 2022

52-Week High: 4818.62
52-Week Low: 3584.13
Daily Trend: UP
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 3940.71
Resistance 2: 3788.10
Resistance 1: 3686.86
Pivot: 3635.49
Support 1: 3534.25
Support 2: 3482.88
Support 3: 3330.27
https://www.prorightline.com/rlch/100622SPX.jpg

NASDAQ Composite - 11073.31 October 6, 2022

52-Week High: 16212.23
52-Week Low: 10565.14
Daily Trend: UP
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 11808.15
Resistance 2: 11278.98
Resistance 1: 10927.30
Pivot: 10749.81
Support 1: 10398.13
Support 2: 10220.64
Support 3: 9691.47


Dow Industrials - 29926.94 October 6, 2022

52-Week High: 36952.65
52-Week Low: 28715.85
Daily Trend: UP
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 31276.24
Resistance 2: 30180.31
Resistance 1: 29452.91
Pivot: 29084.38
Support 1: 28356.98
Support 2: 27988.45
Support 3: 26892.52


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                             MARKET CALENDAR
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--ECONOMIC REPORTS AND EVENTS (all times are Eastern): 
Monday, October 03, 2022:
03-Oct  9:45 am   
03-Oct  10 am   ISM manufacturing index
03-Oct  10 am   Construction spending
03-Oct  Varies   Motor vehicle sales (SAAR)

Tuesday, October 04, 2022:
04-Oct  10 am   Job openings
04-Oct  10 am   Quits
04-Oct  10 am   Factory orders
04-Oct  10 am   Core capital goods orders revision

Wednesday, October 05, 2022:
05-Oct  8:15 am   ADP employment report
05-Oct  8:30 am   International trade balance
05-Oct  9:45 am   
05-Oct  10 am   ISM services index

Thursday, October 06, 2022:
06-Oct  8:30 am   Initial jobless claims
06-Oct  8:30 am   Continuing jobless claims

Friday, October 07, 2022:
07-Oct  8:30 am   Nonfarm payrolls
07-Oct  8:30 am   Unemployment rate
07-Oct  8:30 am   Average hourly earnings
07-Oct  8:30 am   Labor force participation rate, ages 25-54
07-Oct  10 am   Wholesale inventories revision
07-Oct   3 pm   Consumer credit

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: "Hurry, Hurry, Step Right Up!"

Don't pay much attention to all the hype from brokerage analysts or the business media. Brokerage firms usually have more than just a casual interest in stocks they tout, and many times so does the media. 

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                      STOCKS COVERED IN THIS ISSUE    
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CONSUMER CYCLICAL SECTOR

Franchise Group, Inc. (FRG: Consumer Cyclical/Specialty Retail) - BEARISH U-TURN. FRG's reaction after running into moving average resistance on Thursday sets up this stock for a Bearish U-Turn trade. Having spent the past few days of moving higher, FRG is now likely to revert back to its dominant weekly downtrend. Get ready to SELL short shares if FRG drops to our entry at 25.51. Once in the trade, place a 2.44 trailing stop, which should be tightened to 1.22 after a 2.78 profit. FRG closed Thursday at 26.56. Earnings Report Date: Oct 31, 2022. Beta: 1.66. Market-Cap: 1.072B. Optionable.

YETI Holdings, Inc. (YETI: Consumer Cyclical/Leisure) - BEARISH U-TURN. During Thursday's trading action, YETI encountered solid resistance near its 50 EMA (Exponential Moving Average) and looks ready for a possible reversal. The resulting Bearish U-Turn set-up is the basis for a potential SHORT play, so get ready to enter a position in YETI on a further decline to our trigger at 29.82. Set a 2.48 trailing stop, tightening to 1.24 on a 3.18 gain. YETI ended the latest session at 30.85. Earnings Report Date: Nov 10, 2022. Beta: 2.50. Market-Cap: 2.659B. Optionable.

HEALTHCARE SECTOR

uniQure N.V. (QURE: Healthcare/Biotechnology) - SQUEEZE PLAY. QURE shareholders know what it feels like to be squeezed. Thursday's slim price range reveals uncertainty on both sides of the table, a situation which often resolves itself by either Bears or Bulls quickly gaining a clear advantage. The question is "who will win?" Near-term market action tell us whether we should sell short or we should buy shares instead. QURE closed Thursday at 20.21. The plan is to enter in the right direction by placing a BUY trigger at 20.75 and a SELL short trigger at 19.2. Once QURE establishes direction, place your triggered order. As soon as you are in the trade, place a trailing stop in the amount of 1.55. After you've collected a 1.98 profit, tighten the stop to 0.78. Earnings Report Date: Oct 24, 2022. Beta: 0.99. Market-Cap: 944.395M. Optionable.

Viridian Therapeutics, Inc. (VRDN: Healthcare/Biotechnology) - SQUEEZE PLAY. The ticker for Thursday's session shows VRDN 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 21.04 and a SELL short trigger at 19.68. When VRDN 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 1.36 trailing stop. Upon reaching a 2.58 profit, resize the stop to 0.68. Earnings Report Date: Nov 02, 2022. Beta: 0.92. Market-Cap: 814.132M. Optionable.

IVERIC bio, Inc. (ISEE: Healthcare/Biotechnology) - SQUEEZE PLAY. Thursday's trading session left ISEE 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 21.84 and your SELL short trigger at 19.99. One of the orders will be triggered by upcoming price action. When your market order is filled, cancel the remaining trigger and enter a 1.85 trailing stop. Once you have a 2.92 profit, reduce the stop to 0.93. Earnings Report Date: Nov 07, 2022. Beta: 1.55. Market-Cap: 2.447B. 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/ 

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                           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  
---------------- -------     --------    -------     ------  -------   
Nasdaq Inc        NDAQ       7/20/2022  8/29/2022    3-for-1   Yes
Tesla             TSLA       8/5/2022   8/25/2022    3-for-1   Yes
Palo Alto Net     PANW       8/23/22    9/14/22      3-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/ 
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Best of luck and have a Great Week!
 
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