September 26, 2023 - The RightLine Report
Notes From The Editor
Contrary to popular opinion, you don't have to be a genius to be a successful stock trader. In fact, folks of average intelligence tend to do better in the markets than the super-smart types. From what I've learned over the years, having the self discipline to follow a clearly defined routine is much more important than a high IQ.
For example, you probably already know that it is "intelligent" to include Risk Control in your trading routine. However, do you always use a risk calculator to determine your position size before you enter a trade? And how about trade execution? Have you ever ordered the wrong number of shares? Or bought the wrong stock? Have you ever gone short when you meant to go long?
Believe me, you're not alone. After talking with hundreds of traders I've come to the conclusion that intelligence and self-control are not the same thing. In the real world, a high percentage of intelligent people are very undisciplined. Many have a hard time following a simple routine, and will do anything to avoid tasks they consider to be monotonous or tedious.
Just like most sports, the game of stock trading is repetitive. Successful traders tend to do the same things over and over. We're not talking about extremely difficult tasks, like doing ten single-handed pushups every hour of the day. It's the simple jobs that are often the most challenging.
For example, trade execution is similar to filling out a personal information form online. Have you ever had to retype simple data - like a credit card or social security card number more than twice to get it right? Knowing how to get it right the first time is the kind of discipline that makes for a good trader.
Fortunately this type of self-discipline can be acquired. However, it is one of those things that we have to dig in and learn on our own. At best IQ contributes around 20% to the aspects that determine life success, leaving around 80% to other factors. These factors include the ability to motivate ourselves, to practice and persist when we face frustration, to control our impulses and change our moods when necessary.
And granted, it does help if someone reminds us to "pay attention" from time to time!
Trade well!
Thomas Sutton, Editor
Stocks Covered Today Stock Splits
Quick List
Stock 09/26 09/26 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
------ -------- -------- -------- -------- --------------- --------
RCKT 20.57 0.14 21.78 2.12/1.06 1.02
FLR 36.33 0.14 37.73 2.82/1.41 1.64
NSC 198.27 -4.61 192.16 12.82/6.41 7.32
AMRC 40.48 -1.52 39.2 4.18/2.09 3.36
FSS 59.16 -0.35 60.31 57.07 3.24/1.62 2.44
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
Following a brief rebound on Monday, US stocks closed on Tuesday near their lowest points for the fourth time in the last five days, driven by rising Treasury yields reaching new highs. Sectors like Transportation, particularly airlines, faced further weakness as oil prices maintained their ten-month highs. Additionally, the surge in interest rates raised concerns about its potential impact on discretionary spending, leading to declines in retail, staple, and leisure stocks.
The current decline in the stock market has extended into a fourth week, with multiple negative factors converging, showing little sign of dissipating. These include concerns regarding the delayed effects of Fed tightening, the impact of higher oil prices on inflation and consumer spending, the resumption of student loan repayments, prominent labor strikes, and the looming possibility of a government shutdown, just five days away.
With the recent Fed meeting concluded and the message of "higher rates for a longer duration," both stock and bond markets remain under pressure. They are now squarely focused on the economic outlook, with PCE inflation data on the horizon. Treasury yields continue to hover at 16-year highs, putting pressure on growth and interest rate-sensitive stocks and sectors.
There is a looming threat of a government shutdown, as Congress has just five days left to pass a stopgap funding measure before funding runs out. In the event that Congress fails to act before Sunday October 1st, certain agencies could experience delays in releasing routine economic data related to wages, employment, inflation, and output. A shutdown lasting over two weeks could potentially disrupt several key economic data points, including the monthly jobs data.
Amidst these challenges, all eleven S&P sectors closed lower. One notable exception was the early positive performance of Biotech (XBI), which rebounded from 52-week lows following several positive updates in the small to mid-cap biotech sector. The day saw numerous negative statistics and broad stock weakness. For instance, the Russell 2,000 index revealed that the average small-cap stock is now 33% below its 52-week high. Health Care, Communication Services, and Technology sectors have faced even more significant declines. Consumer Staples stocks in the S&P 500 currently stand as the farthest from their 52-week highs within any sector, with a decline of -20.9%. On average, S&P 500 stocks are currently experiencing an 18.2% drawdown from their 52-week highs.
Sep 25, 2023 Sep 26, 2023
-------------------- --------------------
Dow 34,006.88 43.04 33,618.88 -388.00
Nasdaq 13,271.32 59.51 13,063.61 -207.71
S&P 500 4,337.44 17.38 4,273.53 -63.91
NYSE Volume 3.2B 3.48B
NYSE Advancers 1,394 452
NYSE Decliners 1,507 2,483
Nasdaq Volume 4.11B 4.71B
Nasdaq Advancers 1,393
Nasdaq Decliners 2,255 2,947
New Highs/Lows
09/19 09/20 09/21 09/22 09/25 09/26
--------------------------------------------
NYSE New Highs 46 50 14 21 25 19
NYSE New Lows 103 68 220 176 249 287
Nasdaq New Highs 44 52 27 32 45 32
Nasdaq New Lows 297 275 444 366 428 386
Stocks Covered Today Stock Splits
TRADER'S TIP: "What If I Had A Crystal Ball?"
You don't need a crystal ball if you prepare for each trade with the "what if" approach. Always remember to ask these questions before entering any position - "What will I do if price moves in my favor?" And "What will I do if price moves against me?" Most traders and investors never consider these questions at all, so simply writing down specific answers will put you way ahead of the game.
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 - 4273.53 September 26, 2023
52-Week High: 4607.07
52-Week Low: 3491.58
Daily Trend: DOWN
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 4667.37
Resistance 2: 4517.50
Resistance 1: 4418.78
Pivot: 4367.63
Support 1: 4268.91
Support 2: 4217.76
Support 3: 4067.89
NASDAQ Composite - 13063.61 September 26, 2023
52-Week High: 14446.55
52-Week Low: 10088.83
Daily Trend: DOWN
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 14489.19
Resistance 2: 13938.55
Resistance 1: 13575.17
Pivot: 13387.90
Support 1: 13024.53
Support 2: 12837.26
Support 3: 12286.62
Dow Industrials - 33618.88 September 26, 2023
52-Week High: 35679.13
52-Week Low: 28660.94
Daily Trend: DOWN
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 35887.19
Resistance 2: 35058.15
Resistance 1: 34510.99
Pivot: 34229.11
Support 1: 33681.95
Support 2: 33400.07
Support 3: 32571.03
Stocks Covered Today Stock Splits
Market Calendar
ECONOMIC REPORTS AND EVENTS (all times are Eastern): MONDAY, SEPT. 25 None scheduled TUESDAY, SEPT. 26 8:30 am New home sales 9:00 am S&P Case-Shiller home price index (20 cities) 10:00 am Consumer confidence S 1:30 pm Fed Gov. Bowman speaks WEDNESDAY, SEPT. 27 8:30 am Durable-goods orders 8:30 am Durable-goods minus transportation THURSDAY, SEPT. 28 8:30 am Initial jobless claims 8:30 am GDP (revision) 1:00 pm Fed Gov. Cook speaks 4:00 pm Fed Chairman Powell speaks FRIDAY, SEPT. 29 8:30 am Personal income 8:30 am Personal spending 8:30 am PCE index 8:30 am Core PCE index 8:30 am PCE (year-over-year) 8:30 am Core PCE (year-over-year) 8:30 am Advanced U.S. trade balance in goods 8:30 am Advanced retail inventories Aug. 8:30 am Advanced wholesale inventories 9:45 am Chicago Business Barometer 10:00 am Consumer sentiment (final) 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: "Four Cornerstones of Successful Trading"
The four primary objectives of a Trader are to:
1. Clearly define how you see the market.
2. Know under what circumstances you will enter it.
3. Determine in advance what has to happen for you to accept that your trade is or isn't working.
4. Know when to exit your position.
Stocks Covered in This Issue
HEALTHCARE SECTOR
Rocket Pharmaceuticals, Inc. (RCKT: Healthcare/Biotechnology) - BULLISH BOUNCE. RCKT's positive weekly uptrend is still intact despite recent selling that has driven share prices lower. Price action on Tuesday 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 RCKT back in step with the bullish weekly trend, so our BUY entry trigger is set at 21.78. Once you hold a position, trail a stop of 2.12. Tighten it to 1.06 on a 1.02 gain. RCKT closed at 20.57 on Tuesday. Earnings Report Date: Nov 01, 2023. Beta: 1.15. Market-Cap: 1.851B. Optionable.
INDUSTRIALS SECTOR
Fluor Corporation (FLR: Industrials/Engineering & Construction) - BULLISH BOUNCE. The charts for FLR show that despite the downward pressure from sellers recently, the weekly uptrend is still going strong. Buyers showed up again on Tuesday, 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 37.73, and follow your entry with a trailing stop of 2.82. Tighten it to 1.41 when a 1.64 profit is reached. FLR ended the latest session at 36.33. Earnings Report Date: Nov 02, 2023. Beta: 2.26. Market-Cap: 5.209B. Optionable.
Norfolk Southern Corporation (NSC: Industrials/Railroads) - BEARISH U-TURN. NSC's weekly downtrend was recently interrupted by a bullish counter-trend rebound. Unfortunately for Bulls this uphill bounce reversed on Tuesday after running into resistance. NSC is now at risk of dropping even lower. On a continued pullback, short entries can be taken at 192.16. Manage your position with a 12.82 stop, pulling it up to 6.41 on a gain of 7.32. NSC closed at 198.27 on Tuesday. Earnings Report Date: Oct 24, 2023. Beta: 1.29. Market-Cap: 45.01B. Optionable.
Ameresco, Inc. (AMRC: Industrials/Engineering & Construction) - BEARISH U-TURN. The weekly trend for AMRC is down, but recent daily price activity has lifted shares upward in what's known as a "counter-trend" bounce. As the name implies, this type of rebound is against the main trend. These bounces tend to revert back to the direction of the main trend - in this case downward - once the bounce reaches significant resistance. This is exactly the situation AMRC finds itself in, as Tuesday's recoil from moving average resistance presents the beginnings of a possible return to the weekly downtrend. AMRC now sits at 40.48 after reaching an intra-day high of 42.82 during the latest session. Place a short-SELL order with your broker if price drops to the 39.2 level. Follow your entry with a trailing stop of 4.18 and tighten to 2.09 on a 3.36 profit. Earnings Report Date: Oct 30, 2023. Beta: 1.33. Market-Cap: 2.113B. Optionable.
Federal Signal Corporation (FSS: Industrials/Pollution & Treatment Controls) - 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 FSS. A move to the upside will trigger our BUY entry at 60.31, while a drop to 57.07 will trigger our SELL short entry. Follow your position with a 3.24 trailing stop. Tighten the stop to 1.62 once you have a 2.44 gain. FSS closed Tuesday at 59.16. Earnings Report Date: Nov 01, 2023. Beta: 1.09. Market-Cap: 3.608B. 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.
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. The information provided is obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. The publishers of The RightLine Report are not brokers or financial advisors, and are not acting in any way to influence the purchase or sale of any security. Stock picks, entry points and exit points should be considered an information resource to assist the trader in developing a trading plan and it is the sole responsibility of the reader to conduct his or her own due diligence before executing a trade. Trading securities should be considered speculative with a high degree of volatility and risk.
The publishers of The RightLine Report recommend that anyone trading securities should do so with caution, exercise prudent trading discipline and have a personal risk management strategy in place before doing so. It is possible at this or some subsequent date, the publishers and staff of The Pro Right Line Corp. may own, buy or sell securities presented. The Pro Right Line Corp. is not a financial advisory service. Its publishers, owners or investors, are not liable for any losses or damages, monetary or otherwise, that result from the content of The RightLine Report. Past RightLine Report performance may not be indicative of future performance.
All subscriptions and/or use of the RightLine.net website are subject to RightLine's "Terms of Use" and "Subscriber Terms & Conditions" which are posted at www.rightline.net.
Any REDISTRIBUTION of the above information, without The RightLine's written consent, is STRICTLY PROHIBITED.
Copyright / The Pro Right Line Corporation - All Rights Reserved
Click Here To Unsubscribe