September 14, 2023 - The RightLine Report
Notes From The Editor
In a previous issue of the RightLine Report we talked about the importance of adapting to shifts in the market. One of the best ways to track these changes is to monitor your own trades. This allows you to see emerging trends more quickly, and helps protect you from unexpected twists and turns.
When it comes to monitoring tools, nothing beats a trading diary. In addition to helping you spot market patterns, they also help you track trends in your personal trading and identify which set-ups are most effective in the current trading environment.
A simple spreadsheet is all you need. Each row represents a trade, with the left-most column listing the date the position was entered. Moving right, in each column, you have details such as the ticker, the size of the position, whether you bought or sold short, the price you entered, and the stops that you've used. When the trade is exited, the remaining columns are filled in: date closed, net gain/loss in dollars, and net gain/loss as a percentage. For these final two columns, many traders prefer to color-code: red for losses, green for gains, black for breakeven.
To this basic information, it's a good idea to add some columns that help with monitoring. This might include the stock's sector, the prevailing market trend when you entered the trade, and a column for your general comments and thoughts on the trade.
While this may sound like a lot of information, it's actually quite digestible in spreadsheet format. At a quick glance you'll be able to spot patterns that can be used to increase your profitability. Are your tech sector trades gradually becoming less profitable? Are your short trades yielding larger gains? Is a certain sector consistently outperforming? Use this tool to find out! Your account will thank you.
Here's to profits,
Kent Barton
Senior Analyst
Stocks Covered Today Stock Splits
Quick List
Stock 09/14 09/14 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
------ -------- -------- -------- -------- --------------- --------
IPI 25.77 1.01 26.22 24.43 1.79/0.9 2.02
CVI 35.22 0.47 36.14 33.92 2.22/1.11 2.24
AFRM 23.62 0.27 24.47 22.78 1.69/0.85 2
AYX 35.61 0.56 36.15 33.82 2.33/1.17 2.14
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.
Stocks Covered Today Stock Splits
Market Summary
Stocks ended the day on a positive note Thursday, as traders absorbed retail sales figures that surpassed forecasts and a US producer price index (PPI) inflation report that showed mixed results. The market rally was extensive, with both cyclical and defensive sectors performing strongly. In the international arena, Asian markets closed higher ahead of China's economic-activity report scheduled for Friday. European markets also registered gains, particularly after the European Central Bank (ECB) opted to raise policy rates by 25 basis points to 4%.
Meanwhile, oil prices continued their ascent, reaching approximately $90 per barrel. Treasury yields across various maturities rose during the day, with both the 10-year and 2-year yields experiencing gains.
Employment data for July and August indicated signs of a labor market that's easing, which could potentially lead to reduced consumer activity in the coming months.
Sep 13, 2023 Sep 14, 2023
-------------------- --------------------
Dow 34,575.53 -70.46 34,907.11 331.58
Nasdaq 13,813.59 39.97 13,926.05 112.47
S&P 500 4,467.44 5.54 4,505.10 37.66
NYSE Volume 3.54B 3.68B
NYSE Advancers 1,134 2,290
NYSE Decliners 1,748 629
Nasdaq Volume 4.86B 4.66B
Nasdaq Advancers 1,637 2,885
Nasdaq Decliners 2,675 1,401
New Highs/Lows
09/07 09/08 09/11 09/12 09/13 09/14
--------------------------------------------
NYSE New Highs 40 48 65 67 51 64
NYSE New Lows 116 96 75 95 93 63
Nasdaq New Highs 39 40 58 60 32 49
Nasdaq New Lows 274 249 202 197 215 185
Stocks Covered Today Stock Splits
TRADER'S TIP: "The Big Kid On The Block"
The S&P 500 index is a powerful force for the market to reckon with, yet its influence varies from one individual stock to the next. This is one reason we include the "beta" for each stock we put into play - so that you will know how much effect movement in the S&P 500 has on YOUR stock!
For more on beta, click on this link: http://www.rightline.net/education/beta.html
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 - 4505.10 September 14, 2023
52-Week High: 4607.07
52-Week Low: 3491.58
Daily Trend: UP
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
NASDAQ Composite - 13926.05 September 14, 2023
52-Week High: 14446.55
52-Week Low: 10088.83
Daily Trend: UP
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 14865.53
Resistance 2: 14358.37
Resistance 1: 14059.95
Pivot: 13851.21
Support 1: 13552.79
Support 2: 13344.05
Support 3: 12836.89
Dow Industrials - 34907.11 September 14, 2023
52-Week High: 35679.13
52-Week Low: 28660.94
Daily Trend: UP
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 35990.87
Resistance 2: 35303.31
Resistance 1: 34939.95
Pivot: 34615.75
Support 1: 34252.39
Support 2: 33928.19
Support 3: 33240.63
Stocks Covered Today Stock Splits
Market Calendar
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
Stocks Covered Today Stock Splits
TRADER'S TIP: "Narrow Range Breakouts"
Stock prices will often become trapped inside of a narrowing price range. This powerful pattern results from a series of lower-highs and higher-lows, which squeeze prices into an ever-tightening pattern. Similar to pressure building up inside of a bottle, the increasing tension between buyers and sellers shifts the price dynamics into "breakout mode." The resulting price move can be very fast and powerful. Once price enters breakout mode, we can reasonably predict that there will soon be an expansion in price volatility - but we can't always predict which direction to enter the potential trade. To solve this dilemma, we prepare both a buy and a sell-short entry, and then let the inevitable price movement "pull" us into the trade.
Stocks Covered in This Issue
BASIC MATERIALS SECTOR
Intrepid Potash, Inc. (IPI: Basic Materials/Agricultural Inputs) - SQUEEZE PLAY. One interesting trait of price volatility is that it cycles back and forth through periods of expansion and contraction. Stocks that have recently seen their daily price range shift from an average or wide range to an extremely contracted state are ideal candidates for expansive price moves. In many cases the next move is relatively fast and covers a sizable amount of territory. To take advantage of these trades we use both a BUY and a SELL entry. This allows us to enter in whichever direction the breakout takes. In IPI's case we will enter a BUY should it reach the 26.22 level, or a SELL short trade if it drops to 24.43. As usual a trailing stop is essential, 1.79 which should be tightened to 0.9 on a 2.02 gain. IPI closed Thursday at 25.77. Earnings Report Date: Oct 31, 2023. Beta: 2.14. Market-Cap: 339.198M. Optionable.
ENERGY SECTOR
CVR Energy, Inc. (CVI: Energy/Oil & Gas Refining & Marketing) - SQUEEZE PLAY. Trader indecision has put CVI 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 36.14 and a SELL short entry at 33.92. Now it's up to CVI to show us which entry will be filled. Once the trade is underway place a 2.22 trailing stop, which can be tightened to 1.11 after you achieve a 2.24 profit. CVI closed on Thursday at 35.22. Earnings Report Date: Oct 30, 2023. Beta: 1.62. Market-Cap: 3.541B. Optionable.
TECHNOLOGY SECTOR
Affirm Holdings, Inc. (AFRM: Technology/Software-Infrastructure) - SQUEEZE PLAY. When a stock's daily price range contracts to an unusually low point, you can safely assume that in most cases a breakout from that range will result in a nice price move. To capture a portion of this potential movement we have set both a long and a short entry into AFRM. A move to the upside will trigger our BUY entry at 24.47, while a drop to 22.78 will trigger our SELL short entry. Follow your position with a 1.69 trailing stop. Tighten the stop to 0.85 once you have a 2 gain. AFRM closed Thursday at 23.62. Earnings Report Date: Nov 06, 2023. Beta: 3.07. Market-Cap: 7.069B. Optionable.
Alteryx, Inc. (AYX: Technology/Software-Application) - SQUEEZE PLAY. The struggle between buyers and sellers has resulted in AYX's narrowest trading range of the past seven sessions. With neither group able to take complete control on Thursday, 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 36.15 and a SELL order at 33.82. 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 2.14 gain. AYX closed Thursday at 35.61. Earnings Report Date: Oct 30, 2023. Beta: 0.51. Market-Cap: 2.58B. 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.
Stocks Covered Today Stock Splits
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
---------------- ------- -------- ------- ------ -------
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.
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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