Notes From The Editor

I've noticed that the Weather Channel and other media present a lot of programming about tornados. Many who have experienced one of these ferocious swirling storms say the noise is deafening. The best description I've heard is that it sounds like you're standing next to the railroad tracks while a freight train roars by.

On a much smaller scale that's similar to the type of noise traders typically hear when the stock market is swirling wildly in a downward spiral. Day after day the local and national media keep viewers informed of the latest price gyrations with a sense of worry and uneasiness. After all, this is money they're talking about.

Trading in these conditions presents unique challenges. We all breathe in the emotional air around us, so a negative atmosphere can potentially have an impact on our performance.

I was at a birthday party once when a guest I'd just met began pouring out his worries to me about the economy and the stock market. He eyes bulged and I could feel the intensity of his convictions. He seemed almost hypnotized by his own rhetoric as he spoke fearfully, then abruptly said "Don't you feel the same way?"

I politely told him that over the years I experienced some of my best financial results during the worst economic periods. He appeared surprised by my response, but instead of pursuing my positive input to the conversation and asking questions, he chose to ignore it. Within a few moments he stepped away and began spreading his pessimistic outlook to others who were nearby.

Here are a few things we can do to insure that our trading and financial "immune systems" are functioning at an optimum level:

First, turn down the noise and turn off the tube. Everyone has an opinion, yet an opinion won't even buy you a cup of coffee.

Second, use your response ability. Respond to any negative comments in a way that enhances instead of lowers your awareness and mental state. People usually don't mean to be negative; they just do it out of habit. Unfortunately even those with good intentions often do a lot of harm.

Third, remind yourself that a trend is your friend regardless of whether it's up or down. Everyone knows what a Bull Market is, but less than 2% of the population knows what shorting is. Be grateful that you are part of the minority who understand these powerful concepts. After all, the US stock market has been around for over 200 years, yet the most investors still don't know how to make money unless the Bull is raging.

Bottom Line: Put your knowledge to work. Guard your mind from the accumulative effect of non-stop "news". Be proactive, and you will be surprised to find inspiration in your own actions.

Trade well,

~ Thomas Sutton, Editor

Quick List

    
Stock     09/01     09/01      Buy      Short   Trailing Stops     Gain 
Symbol    Price      +/-      Entry     Entry   Initial/Tighten   Amount 
------  --------  --------  --------  --------  ---------------  --------

DKL       61.61     -0.40     63.25                  5.31/2.66      4.94
SWAV     296.44     -0.42    300.67                28.88/14.44     26.42
ANIP      37.00      0.11     37.84                  3.01/1.51      3.86
TMDX      51.91     -0.12     52.65                  4.63/2.32      7.62
BEKE      17.35     -0.69     17.73                  2.01/1.01      1.76

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.

Market Summary

The major US indices were mixed on Thursday as the Dow and S&P 500 closed higher, while the Nasdaq was lower. Traders digested a round of uninspiring global manufacturing data, with US manufacturing output soft but above estimates, unemployment claims surprisingly down, while productivity and unit labor costs were revised favorably but still indicate economic challenges ahead. Equities headlines included Ciena Corporation (CIEN $45) missing earnings forecasts, Campbell Soup (CPB $49) offering mixed guidance and Hormel Foods (HRL $47) falling short of profit estimates. The USD/dollar was higher, gold, oil prices and treasuries were lower, lifing yields.

                        Aug 31, 2022           Sep 1, 2022    
                  --------------------   --------------------
Dow                 31,510.43  -280.44     31,656.42   145.99
Nasdaq              11,816.20   -66.93     11,785.13   -31.08
S&P 500              3,955.00   -31.16      3,966.85    11.85

NYSE Volume                      4.68B                  4.16B
NYSE Advancers                   1,003                    944
NYSE Decliners                   2,195                  2,279

Nasdaq Volume                    4.98B                   4.8B
Nasdaq Advancers                 1,924                  1,565
Nasdaq Decliners                 2,570                  2,999

                                 New Highs/Lows

                   08/25  08/26  08/29  08/30  08/31  09/01
                 --------------------------------------------
NYSE New Highs        43     28     30     12     11     14
NYSE New Lows         34     97    137    147    160    252
Nasdaq New Highs      53     37     24     18     24     34
Nasdaq New Lows       99    172    227    256    227    425
   

TRADER'S TIP: "The Market Shows Its Hand"

Breakouts through key resistance levels, and breakdowns through key support levels both signal price moves that are likely to persist for some time. The power of trend is one of the strongest allies a trader can have, so make it your friend regardless of whether it is up or down. This means learning to play the market from both sides - buying when the trend is up, and selling short when the trend is down. Leave your Bull or Bear bias at the door and let the market tell you what IT wants to do!

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 - 3966.85 September 1, 2022

52-Week High: 4818.62
52-Week Low: 3636.85
Daily Trend: DOWN
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 4396.88
Resistance 2: 4251.50
Resistance 1: 4154.58
Pivot: 4106.12
Support 1: 4009.20
Support 2: 3960.74
Support 3: 3815.35

NASDAQ Composite - 11785.13 September 1, 2022

52-Week High: 16212.23
52-Week Low: 10565.14
Daily Trend: DOWN
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 13341.66
Resistance 2: 12827.34
Resistance 1: 12484.52
Pivot: 12313.02
Support 1: 11970.20
Support 2: 11798.70
Support 3: 11284.38
        
Dow Industrials - 31656.42 September 1, 2022

52-Week High: 36952.65
52-Week Low: 29653.27
Daily Trend: DOWN
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 35332.80
Resistance 2: 34024.43
Resistance 1: 33153.91
Pivot: 32716.06
Support 1: 31845.54
Support 2: 31407.70
Support 3: 30099.33
 

Market Calendar

ECONOMIC REPORTS AND EVENTS (all times are Eastern):    

FRIDAY, SEPT. 2 
8:30 am 	Nonfarm payrolls
8:30 am 	Unemployment rate 
8:30 am 	Average hourly earnings
8:30 am 	Labor-force participation rate
10 am 	Factory orders 
10 am 	Core capital equipment orders revision 

For a chart of typical Up or Down market reactions to specific major US economic reports 
go to:  Economic Indicator Effects

TRADER'S TIP: "The Undercapitalization Myth"

"A loser is not undercapitalized - his mind is underdeveloped."

~ Dr. Alexander Elder

Stocks Covered in This Issue

ENERGY SECTOR

Delek Logistics Partners, LP (DKL: Energy/Oil & Gas Midstream) - NEW HIGH DIP. DKL's latest 52-week high and subsequent pullback has resulted in one of our favorite trade opportunities. An encounter with support on Thursday sets the stage for a low-risk entry. Now watch for DKL to move up to our BUY trigger at 63.25. Once triggered, place your market order. When the order is filled, follow with a trailing stop of 5.31. Tighten the stop to 2.66 when you have a 4.94-point gain. DKL last closed at 61.61. Earnings Report Date: Nov 02, 2022. Beta: 2.32. Market-Cap: 2.679B. Optionable.

HEALTHCARE SECTOR

ShockWave Medical, Inc. (SWAV: Healthcare/Medical Devices) - NEW HIGH DIP. For a stock, the ladder to the top has rungs made up of 52-week highs. Each step up is followed by profit taking that usually causes a temporary pullback. The New High Dip setup uses these dips for safe entries into strong stocks. SWAV is now showing strength, so plan to BUY shares when this winner reaches our trigger at 300.67. Follow your position with a 28.88 trailing stop, which you can tighten to 14.44 when you have gained 26.42 points. SWAV last closed at 296.44. Earnings Report Date: Nov 07, 2022. Beta: 1.24. Market-Cap: 10.65B. Optionable.

ANI Pharmaceuticals, Inc. (ANIP: Healthcare/Drug Manufacturers-Specialty & Generic) - BULLISH BOUNCE. The charts for ANIP show that despite the downward pressure from sellers recently, the weekly uptrend is still going strong. Buyers showed up again on Thursday, 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 37.84, and follow your entry with a trailing stop of 3.01. Tighten it to 1.51 when a 3.86 profit is reached. ANIP ended the latest session at 37.00. Earnings Report Date: Oct 31, 2022. Beta: 1.05. Market-Cap: 644.762M. Optionable.

TransMedics Group, Inc. (TMDX: Healthcare/Medical Devices) - BULLISH BOUNCE. Looking a bit frayed after sliding downhill in recent sessions, on Thursday TMDX seemed intent on initiating a rebound. With moving average support nearby, TMDX is at a logical place for Bulls to regroup and extend the familiar uptrend that shareholders have become accustomed to. On continued buying, plan on taking long entries with a BUY at 52.65. Manage risk with a 4.63 stop. Tighten your stop to 2.32 when you have a 7.62 profit. TMDX ended the day at 51.91. Earnings Report Date: Nov 07, 2022. Beta: 1.63. Market-Cap: 1.652B. Optionable.

REAL ESTATE SECTOR

KE Holdings Inc. (BEKE: Real Estate/Real Estate Services) - BULLISH BOUNCE. BEKE's positive weekly uptrend is still intact despite recent selling that has driven share prices lower. Price action on Thursday 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 BEKE back in step with the bullish weekly trend, so our BUY entry trigger is set at 17.73. Once you hold a position, trail a stop of 2.01. Tighten it to 1.01 on a 1.76 gain. BEKE closed at 17.35 on Thursday. Earnings Report Date: Nov 07, 2022. Beta: -1.99. Market-Cap: 22.151B. 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.

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  
---------------- -------     --------    -------     ------  -------   
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    

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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