September 15, 2022 - The RightLine Report ********************************** NOTES FROM THE EDITOR **********************************
Pattern Day Trading: Demystified
*********************************** "QUICK LIST" *********************************** Stock 09/15 09/15 Buy Short Trailing Stops Gain Symbol Price +/- Entry Entry Initial/Tighten Amount ------ -------- -------- -------- -------- --------------- -------- TSE 24.98 0.24 25.7 23.83 1.87/0.94 2.36 LOVE 25.20 0.89 25.77 23.48 2.29/1.15 3.6 MRTX 82.49 0.62 85.59 6.77/3.39 7.72 INSM 24.18 0.05 24.56 22.84 1.72/0.86 2.14 ASLE 20.89 0.27 21.31 1.51/0.76 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" 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/ ***************************** MARKET SUMMARY ***************************** The major US stock indices were lower on Thursday as traders appear to be pricing in a 75-basis-point rate hike as the most likely outcome for next week's Fed Bank FOMC - Federal Open Market Committee - meeting. A heavy economic calendar included below par retail sales, a dip in weekly initial unemployment claims and an unexpected decline in industrial production. New York manufacturing activity improved but remains in contraction territory, while Philadelphia manufacturing surprisingly fell into contraction territory. In addition, import prices decreased by a smaller amount than predicted and business inventories increased as forecast. On the equities front, US railroad companies reached a tentative deal to avoid a strike, Humana (HUM $497) increased its full-year guidance, and Adobe Incorporated (ADBE $309) is set to acquire collaborative design platform Figma for roughly $20-billion. Oil prices and gold finished the trading session lower, the USD/dollar closed near even, and treasuries were mostly lower, lifting yields. Sep 14, 2022 Sep 15, 2022 -------------------- -------------------- Dow 31,135.09 30.12 30,961.82 -173.27 Nasdaq 11,719.68 86.10 11,552.36 -167.32 S&P 500 3,946.01 13.32 3,901.35 -44.66 NYSE Volume 4.33B 4.48B NYSE Advancers 1,663 938 NYSE Decliners 1,526 2,280 Nasdaq Volume 4.89B 4.84B Nasdaq Advancers 2,236 1,943 Nasdaq Decliners 2,331 2,617 New Highs/Lows 09/08 09/09 09/12 09/13 09/14 09/15 -------------------------------------------- NYSE New Highs 23 36 42 17 33 18 NYSE New Lows 101 29 37 105 183 176 Nasdaq New Highs 34 48 57 37 37 25 Nasdaq New Lows 200 95 97 218 265 266 *********************************** TRADER'S TIP: *********************************** TRADER'S TIP: "Making Decisions Builds Confidence" Each time we enter or exit a trade we make a decision. Every decision we make causes us to grow - IF we give our experiences the value they deserve. However, if we short-change ourselves for not always making "perfect" choices and view our experiences as "mistakes" our confidence will go down instead of up. Just remember that trading conditions are rarely optimum, and we're always making decisions under less than ideal circumstances. Give yourself a break, knowing that only YOU can set the proper value for each experience you have. Be sure you make the right choice. Build your confidence and never value any trade or other experience as worthless. ************************** THE TECHNICAL ANALYST ************************** 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 - 3901.35 September 15, 2022 52-Week High: 4818.62 52-Week Low: 3636.85 Daily Trend: DOWN 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/091522SPX.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/ *********************************** TRADER'S TIP: *********************************** TRADER'S TIP: "How Do You Get To Carnegie Hall?" We've all heard the answer to this old joke . . . "practice, practice, practice!" While it is certainly obvious that trading successfully requires plenty of it, many investors have yet to apply this ancient bit of oriental wisdom: "Practice is the best of all instructors." *********************************** STOCKS COVERED IN THIS ISSUE *********************************** BASIC MATERIALS SECTOR Trinseo PLC (TSE: Basic Materials/Specialty Chemicals) - SQUEEZE PLAY. The ticker for Thursday's session shows TSE 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 25.7 and a SELL short trigger at 23.83. When TSE 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 1.87 trailing stop. Upon reaching a 2.36 profit, resize the stop to 0.94. Earnings Report Date: Nov 03, 2022. Beta: 1.30. Market-Cap: 873.616M. Optionable. CONSUMER CYCLICAL SECTOR The Lovesac Company (LOVE: Consumer Cyclical/Furnishings, Fixtures & Appliances) - SQUEEZE PLAY. Thursday's trading session left LOVE 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 25.77 and your SELL short trigger at 23.48. One of the orders will be triggered by upcoming price action. When your market order is filled, cancel the remaining trigger and enter a 2.29 trailing stop. Once you have a 3.6 profit, reduce the stop to 1.15. Earnings Report Date: Dec 06, 2022. Beta: 2.38. Market-Cap: 382.647M. Optionable. HEALTHCARE SECTOR Mirati Therapeutics, Inc. (MRTX: Healthcare/Biotechnology) - BULLISH BOUNCE. Among other strengths, the Bullish Bounce protects traders from buying a stock "at the top" of its current cycle. The entry into this setup always takes place in upward-moving stocks that have retreated a bit under normal conditions. Now sitting at 82.49, MRTX is on our radar for a BUY entry at 85.59. If you purchase shares of MRTX, be sure to also place a trailing stop of 6.77. Snug it up to 3.39 on a 7.72 gain. Earnings Report Date: Nov 07, 2022. Beta: 0.91. Market-Cap: 4.587B. Optionable. Insmed Incorporated (INSM: Healthcare/Biotechnology) - SQUEEZE PLAY. INSM 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. INSM closed Thursday at 24.18. The plan is to enter in the right direction by placing a BUY trigger at 24.56 and a SELL short trigger at 22.84. Once INSM establishes direction, place your triggered order. As soon as you are in the trade, place a trailing stop in the amount of 1.72. After you've collected a 2.14 profit, tighten the stop to 0.86. Earnings Report Date: Oct 26, 2022. Beta: 1.83. Market-Cap: 2.901B. Optionable. INDUSTRIALS SECTOR AerSale Corporation (ASLE: Industrials/Airports & Air Services) - BULLISH BOUNCE. This trader-friendly setup turns repetitive stock behavior into real profits. Based on the tendency for up-trending stocks to drop briefly and then resume the up-trend, the Bullish Bounce places traders into excellent stocks when conditions are primed for more skyward movement. ASLE's current price action near moving average support signals a potential BUY entry at 21.31, followed by a 1.51 trailing stop which can be tightened to 0.76 upon earning 1.76. ASLE closed Thursday at 20.89. Earnings Report Date: Nov 07, 2022. Beta: 0.46. Market-Cap: 1.081B. 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 *********************************** 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! ********** If you prefer to receive this report in html with color and graphics, or have any questions, send us an email using our contact form at:https://prorightline.com/index.php/contact-us/ ====================================================================== DISCLAIMER The RightLine Report is an information service for investors and traders. It is not a solicitation nor a recommendation or offer to buy or sell securities. 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