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September 13, 2022 - The RightLine Report
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NOTES FROM THE EDITOR
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Five Simple Truths About the Stock Market
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"QUICK LIST"
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Stock 09/13 09/13 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
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JAKK 23.74 -1.79 25.23 22.9 2.33/1.17 3.1
TNK 27.40 -0.08 28.24 26.26 1.98/0.99 1.84
PFHC 20.46 -0.22 21.07 19.38 1.69/0.85 2.66
BCYC 24.42 -0.56 25.33 23.43 1.9/0.95 3.68
AFRM 24.19 -2.60 23.31 2.26/1.13 5.32
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 markets closed significantly lower on Tuesday following the release of a discouraging inflation report. The Consumer Price Index was up unexpectedly in August, and remains seriously elevated. The news arrived as traders continue to wrestle with high expectations of continued aggressive monetary policy from the Federal Reserve Bank, as this latest report likely insurating a 75-basis point rate hike at the next FOMC meeting later this month. A bit of good economic news, small business optimism is now up more than analysts predicted. In equities headlines, the price of Oracle (ORCL $76) dropped on news that the company fell short of earnings estimates, while UBS (UBS $17) shares rallied after the firm announced it will raise its quarterly dividend. The USD/dollar took off like a rocket after the CPI data hit the wires, gold and oil prices declined, treasuries were mixed. Sep 12, 2022 Sep 13, 2022
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Dow 32,381.34 229.63 31,104.97 -1,276.37
Nasdaq 12,266.41 154.10 11,633.57 -632.84
S&P 500 4,110.41 43.05 3,932.69 -177.72
NYSE Volume 3.85B 4.25B
NYSE Advancers 2,430 378
NYSE Decliners 771 2,894
Nasdaq Volume 4.21B 5.24B
Nasdaq Advancers 2,925 993
Nasdaq Decliners 1,656 3,666
New Highs/Lows
09/06 09/07 09/08 09/09 09/12 09/13
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NYSE New Highs 17 16 23 36 42 17
NYSE New Lows 222 141 101 29 37 105
Nasdaq New Highs 35 31 34 48 57 37
Nasdaq New Lows 398 291 200 95 97 218
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TRADER'S TIP:
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TRADER'S TIP: "Computer Based Trading" Computer technology helps us trade more effectively, but only if our methodology is reliable. "Reliable" doesn't necessarily mean complex. In fact most reliable short-term trading methods are fairly simple. However, every method should include some type of technical analysis to time entries and exits, along with a risk management component to prevent account damage. **************************
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 - 3932.69 September 13, 2022 52-Week High: 4818.62 52-Week Low: 3636.85 Daily Trend: UP Weekly trend: UP Weekly Pivot Levels Resistance 3: 4390.42 Resistance 2: 4200.36 Resistance 1: 4133.86 Pivot: 4010.30 Support 1: 3943.80 Support 2: 3820.24 Support 3: 3630.18 https://www.prorightline.com/rlch/091322SPX.jpg--ECONOMIC REPORTS AND EVENTS (all times are Eastern): Monday, September 12, 2022: 11 am NY Fed 3-year inflation expectations Tuesday, September 13, 2022: 6 am NFIB small-business index 8:30 am Consumer price index 8:30 am Core CPI 8:30 am CPI (year-on-year) 8:30 am Core CPI (year-on-year) 2 pm Federal budget Wednesday, September 14, 2022: 8:30 am Producer price index final demand Thursday, September 15, 2022: 8:30 am Initial jobless claims 8:30 am Continuing jobless claims 8:30 am Retail sales 8:30 am Retail sales excluding vehicles 8:30 am Philadelphia Fed manufacturing index 8:30 am Empire State manufacturing index 8:30 am Import price index 9:15 am Industrial production index 9:15 am Capacity utilization 10 am Business inventories Friday, September 16, 2022: 10 am UMich consumer sentiment index 10 am UMich 5-year consumer inflation expectations 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: "Trader Tax Status" "Trader tax status" is the IRS designation allowing traders to benefit from a number of positive tax rules. Quite a few of these rules are activated by "Mark-To-Market" accounting procedures. For example, Mark- To-Market converts capital losses - that can only be deducted against capital gains - into ordinary losses that can be deducted against ALL types of income. Be sure to check with your tax accountant for details. ***********************************
STOCKS COVERED IN THIS ISSUE
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CONSUMER CYCLICAL SECTOR JAKKS Pacific, Inc. (JAKK: Consumer Cyclical/Leisure) - SQUEEZE PLAY. The struggle between buyers and sellers has resulted in JAKK's narrowest trading range of the past seven sessions. With neither group able to take complete control on Tuesday, the stock's short term destiny is up for grabs. You can capitalize on this unusually tight condition by placing both a BUY order at 25.23 and a SELL order at 22.9. Regardless of which order is triggered, cancel the other one and follow your entry with a 2.33 trailing stop. Tighten the stop to 1.17 once you have a 3.1 gain. JAKK closed Tuesday at 23.74. Earnings Report Date: Oct 25, 2022. Beta: 2.37. Market-Cap: 230.837M. Not Optionable. ENERGY SECTOR Teekay Tankers Ltd. (TNK: Energy/Oil & Gas Midstream) - SQUEEZE PLAY. Trader indecision has put TNK 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 28.24 and a SELL short entry at 26.26. Now it's up to TNK to show us which entry will be filled. Once the trade is underway place a 1.98 trailing stop, which can be tightened to 0.99 after you achieve a 1.84 profit. TNK closed on Tuesday at 27.40. Earnings Report Date: Nov 02, 2022. Beta: -0.02. Market-Cap: 928.082M. Optionable. ProFrac Holding Corp. (PFHC: Energy/Oil & Gas Equipment & Services) - SQUEEZE PLAY. Sometimes when Bulls and Bears face off in the market arena for a typical day-long battle, there is no clear winner. This is evident when the daily price range contracts to an unusually narrow state. PFHC found itself in this condition on Tuesday when neither buyers or sellers were able to push ahead. This setup provides traders a chance to hop on board the next breakout - whether it's to the upside or down - with little risk of loss. To do this place a BUY order at 21.07 and a SELL short trigger at 19.38. When PFHC moves outside of Tuesday's range, one of the orders will be filled. Once you hold a position of shares, cancel the unfilled order and place a 1.69 trailing stop. After you've got a 2.66 profit, tighten the stop to 0.85. PFHC closed at 20.46 on Tuesday. Earnings Report Date: N/A. Beta: N/A. Market-Cap: 843.77M. Optionable. HEALTHCARE SECTOR Bicycle Therapeutics plc (BCYC: Healthcare/Biotechnology) - SQUEEZE PLAY. In certain stocks a tightly constricted price range is a sign that neither bulls nor bears are confident of winning in the near term. This often means that the side that gives up first causes a quick move in the opposite direction. In these fear dominated skirmishes, opposing traders always benefit from the retreat. In the Squeeze Play setup you can actually play both sides of the inevitable surge. BCYC traders reached this state of stand-off on Tuesday with the tightest range of the past seven days. You can take advantage of their efforts by placing a low risk BUY trigger at 25.33 and a SELL short trigger at 23.43. After one of the two orders is filled, cancel the un-triggered order and place a trailing stop at 1.9 which can be tightened to 0.95 on a 3.68 gain. BCYC closed Tuesday at 24.42. Earnings Report Date: Nov 02, 2022. Beta: 0.76. Market-Cap: 724.69M. Optionable. TECHNOLOGY SECTOR Affirm Holdings, Inc. (AFRM: Technology/Software-Infrastructure) - BEARISH U-TURN. The weight of AFRM's declining weekly trend was lightened recently when shares began to move upward. However, like a swimmer against the tide AFRM encountered strong resistance on Tuesday. Price action indicates a likely return to the previous downtrend, so plan to short AFRM upon reaching our SELL trigger at 23.31. Set a 2.26 trailing stop which can be tightened to 1.13 after you have a 5.32 gain. AFRM ended the latest session at 24.19. Earnings Report Date: Nov 08, 2022. Beta: N/A. Market-Cap: 6.929B. 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 ---------------- ------- -------- ------- ------ ------- 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/ ======================================================================
Best of luck and have a Great Week!
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