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September 12, 2023 - The RightLine Report
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NOTES FROM THE EDITOR
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Trading stocks for a living is not your average job. For example, if you trade from home you probably have a commute to work of less than one-minute.
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"QUICK LIST"
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Stock 09/12 09/12 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
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CTRN 21.36 -0.41 22.29 20.71 1.58/0.79 2.18
CHWY 21.90 -0.45 22.85 21.21 1.64/0.82 1.7
TWST 22.99 0.01 23.56 1.7/0.85 2.28
ADTX 22.89 -2.61 26.28 21.16 5.12/2.56 5.44
MEI 22.77 0.15 23.13 21.55 1.58/0.79 1.12
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/
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MARKET SUMMARY
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Major US. stock indices faced declines on Tuesday, driven by disappointing quarterly results from Oracle (ORCL), which had a negative impact on the Nasdaq Composite (COMP). Additionally, rising oil prices tempered investor optimism, coming just ahead of the monthly consumer price update that holds significance for the Federal Reserve's interest rate decisions. Oracle's stock took a significant hit, falling by nearly 13% following its disappointing revenue report for the previous quarter and a less optimistic outlook for the current one in the software and cloud computing sector. However, Oracle wasn't the only tech giant facing pressure, as Apple (AAPL) witnessed a 2% decline during its annual product launch event, where it introduced new, albeit expensive, iPhone models. Google-parent Alphabet (GOOGL) also saw a 1% decrease as its trial commenced concerning antitrust allegations brought by the Justice Department. A potentially more impactful day for news is anticipated on Wednesday morning with the release of the Labor Department's Consumer Price Index (CPI) for August. This report will influence expectations regarding the Federal Reserve's stance on interest rates, specifically whether they will continue raising rates or pause. The report is expected to indicate that the core inflation rate, which excludes food and energy prices, is still decreasing. However, this alone might not entirely eliminate the possibility of future rate hikes. Despite any improvement in the core rate, inflation is still higher than the Fed's desired level. It appears the market will now focus on how long the Fed will maintain elevated interest rates as opposed to the potential for another rate hike in the current cycle. Sep 11, 2023 Sep 12, 2023
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Dow 34,663.72 87.13 34,645.99 -17.73
Nasdaq 13,917.89 156.37 13,773.61 -144.28
S&P 500 4,487.46 29.97 4,461.90 -25.56
NYSE Volume 3.38B 3.45B
NYSE Advancers 1,578 1,362
NYSE Decliners 1,305 1,519
Nasdaq Volume 4.55B 4.61B
Nasdaq Advancers 2,241 1,892
Nasdaq Decliners 2,023 2,356
New Highs/Lows
09/05 09/06 09/07 09/08 09/11 09/12
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NYSE New Highs 64 38 40 48 65 67
NYSE New Lows 86 88 116 96 75 95
Nasdaq New Highs 77 48 39 40 58 60
Nasdaq New Lows 157 181 274 249 202 197
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TRADER'S TIP:
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TRADER'S TIP: "Chutes and Ladders" All trends are not created equal. Up moves tend to take longer than down moves with similar ranges. In other words, even when the distance in price movement is the same, declines usually occur faster than rallies. **************************
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 - 4461.90 September 12, 2023 52-Week High: 4607.07 52-Week Low: 3491.58 Daily Trend: DOWN Weekly trend: DOWN Weekly Pivot Levels Resistance 3: 4697.91 Resistance 2: 4587.15 Resistance 1: 4522.32 Pivot: 4476.39 Support 1: 4411.56 Support 2: 4365.63 Support 3: 4254.87 https://www.prorightline.com/rlch/091223SPX.jpg--ECONOMIC REPORTS AND EVENTS (all times are Eastern): MONDAY, SEPT. 11 None scheduled TUESDAY, SEPT. 12 None scheduled WEDNESDAY, SEPT. 13 8:30 am Consumer price index 8:30 am Core CPI Aug. 8:30 am CPI (year-over-year) 8:30 am Core CPI (year-over-year) THURSDAY, SEPT. 14 8:30 am Initial jobless claims 8:30 am Producer price index 8:30 am Core PPI Aug. 8:30 am PPI (year-over-year) 8:30 am Core PPI (year-over-year) 8:30 am U.S. retail sales Aug. 8:30 am Retail sales minus autos 10:00 am Business inventories FRIDAY, SEPT. 15 8:30 am U.S. import prices 8:30 am Empire State manufacturing survey 9:15 am Industrial production 9:15 am Capacity utilization 10:00 am Consumer sentiment (prelim) 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: "Setting Stops" Sometimes you'll notice that we include irregular numbers - like 1.02, or 2.56 - in the Initial or Trailing Stop section of our Quick List. There is a calculated reason for this. Market makers - better known by their brokerage firm names - will often manipulate prices to just above or below the daily highs and lows to generate order flow and broker commissions. One key to successful stop placement is to avoid getting swept by market makers in these artificial price moves. A penny or two beyond the usual stop amounts (0.10, .25, .50, etc) will often keep the trade alive. This is because market makers know that many traders with long positions will set stops at ten cents, a quarter, or fifty cents beyond the daily range levels. ***********************************
STOCKS COVERED IN THIS ISSUE
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CONSUMER CYCLICAL SECTOR Citi Trends, Inc. (CTRN: Consumer Cyclical/Apparel Retail) - SQUEEZE PLAY. Traders are feeling the pressure as CTRN's intra-day price range on Tuesday shrunk to the narrowest spread in over a week. The tension between buyers and sellers should provide enough pent-up engergy for a breakout move in the days ahead, so get ready to trade with the new trend. To achieve that, place a BUY entry at 22.29 and a SELL short entry at 20.71. CTRN's price movement will decide which entry is filled. As soon as you're in the trade, enter a 1.58 trailing stop. Tighten it to 0.79 after you get a 2.18 gain. CTRN closed Tuesday at 21.36. Earnings Report Date: Nov 27, 2023. Beta: 2.32. Market-Cap: 182.928M. Optionable. Chewy, Inc. (CHWY: Consumer Cyclical/Internet Retail) - SQUEEZE PLAY. Tuesday's narrow price range has created a potentially profitable setup in CHWY, as sellers and buyers find themselves in a near tie for control of price direction. The next short-term trend could go either way, so prepare for a move out of the draw within the next day or so. Set a BUY entry at 22.85 and a SELL short entry at 21.21. Let CHWY's price action determine your long or short entry. Once the order is filled, place a 1.64 trailing stop, and tighten it to 0.82 upon getting a 1.7 gain. CHWY closed Tuesday at 21.90. Earnings Report Date: Dec 06, 2023. Beta: 0.90. Market-Cap: 9.424B. Optionable. HEALTHCARE SECTOR Twist Bioscience Corporation (TWST: Healthcare/Diagnostics & Research) - BULLISH BOUNCE. If you are looking for another bouncer with profits in mind, TWST fits the bill. Shares have been in retreat-mode lately, but now this stock is in the process of bouncing from support. Currently priced at 22.99, plan to buy shares at 23.56 and use a 1.7 trailing stop. Tighten the stop to 0.85 on a 2.28 gain. Earnings Report Date: Nov 16, 2023. Beta: 1.27. Market-Cap: 1.32B. Optionable. Aditxt, Inc. (ADTX: Healthcare/Biotechnology) - SQUEEZE PLAY. Tuesday's trading action forced ADTX's daily price range into an abnormally narrow state. This translates into opportunity; for the cyclical nature of price volatility is to shrink extensively, then swell rapidly as shares move in one direction or another. Instead of trying to predict the direction ADTX will take when price volatility begins to increase, we'll set both a BUY (long) and a SELL (short) trigger to get us into the right trade. Be ready to BUY shares at 26.28 if ADTX moves higher, and place your order to SELL short at 21.16 if price declines to that level. As usual follow your entry with a trailing stop, 5.12 should be sufficient. Reduce your stop to 2.56 on a 5.44 gain. ADTX closed Tuesday at 22.89. Earnings Report Date: N/A. Beta: 0.64. Market-Cap: 4.355M. Optionable. TECHNOLOGY SECTOR Methode Electronics, Inc. (MEI: Technology/Electronic Components) - SQUEEZE PLAY. A look at MEI's daily chart shows what a price squeeze is all about. The constricted high-low daily trading range has produced a setup similar to a tightly coiled spring. Expect price to move sharply soon, with the direction yet to be determined. Let the upcoming market action resolve whether you will buy shares or sell short. To capture a move either way, place a BUY trigger at 23.13 and a SELL short trigger at 21.55. Once MEI shows which way it's headed, place your triggered entry order. As soon as your order is filled, follow with a trailing stop of 1.58 and tighten to 0.79 on a 1.12 gain. MEI closed Tuesday at 22.77. Earnings Report Date: Nov 29, 2023. Beta: 1.03. Market-Cap: 819.936M. 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 ---------------- ------- -------- ------- ------ ------- 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. 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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