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September 7, 2023 - The RightLine Report
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NOTES FROM THE EDITOR
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Momentum can be a trader's best friend. Once a stock has established a reliable trend, price action seems to develop a life of its own. Jumping on that trend at the right point - when there are no immediate support/resistance levels to get in to the way - is a great way to take advantage of the sustained movement.
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"QUICK LIST"
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Stock 09/07 09/07 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
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KRT 25.25 -0.21 26.19 2.91/1.46 2.76
TPX 45.16 0.04 45.84 2.8/1.4 1.96
MCFT 20.81 0.00 21.19 19.86 1.33/0.67 1.46
BMA 23.90 -0.40 24.62 22.84 1.78/0.89 2.72
AZEK 33.17 -0.03 33.61 2.14/1.07 2.3
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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Equity markets closed in the red on Thursday, with concerns over a potential broadening of China's ban on Apple iPhone products weighing down technology shares. The Nasdaq, which leans heavily on tech stocks, underperformed compared to the broader S&P 500 and Dow Jones indexes. Simultaneously, Treasury yields took a pause from their recent upward trajectory, with both the 10-year and 2-year yields inching lower as investors digested better-than-expected second-quarter productivity figures. September has brought increased volatility so far, with the VIX volatility index up approximately 7%, and the S&P 500 down around 1.3% month-to-date. According to The Wall Street Journal, Chinese officials have instructed central government agencies not to use Apple iPhones or other foreign-branded devices for work. This move is part of China's ongoing effort to reduce dependence on foreign technology and bolster cybersecurity measures. Apple's stock price dropped about 3.0% in response to this news. More broadly, technology shares experienced declines, underscoring the ongoing tech-related tension between China and the USA regarding technology, innovation, and security. Next week, all eyes will be on headline and core CPI (consumer price index) data for August, to be released on Wednesday. Expectations are for headline inflation to rise, driven by climbing oil prices and easier annual comparisons to surpass. Conversely, core inflation is anticipated to decrease. We believe core inflation will continue its downward trend as components such as shelter and rent in the CPI basket start to slow down. Recent signs of easing wage growth should also contribute to a cooling of services inflation over time. While headline inflation may exhibit more volatility, a sustained decrease in core inflation would likely be welcomed by both markets and the Federal Reserve. Sep 6, 2023 Sep 7, 2023
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Dow 34,443.19 -198.78 34,500.73 57.54
Nasdaq 13,872.47 -148.48 13,748.83 -123.64
S&P 500 4,465.48 -31.35 4,451.14 -14.34
NYSE Volume 3.44B 3.77B
NYSE Advancers 1,088 1,042
NYSE Decliners 1,805 1,862
Nasdaq Volume 4.23B 4.32B
Nasdaq Advancers 1,430 1,421
Nasdaq Decliners 2,807 2,857
New Highs/Lows
08/31 09/01 09/04 09/05 09/06 09/07
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NYSE New Highs 78 116 0 64 38 40
NYSE New Lows 20 29 0 86 88 116
Nasdaq New Highs 90 101 0 77 48 39
Nasdaq New Lows 104 95 0 157 181 274
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TRADER'S TIP:
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TRADER'S TIP: "The Psychology of Psychology" In the stock market, psychology obviously plays a huge role in the dynamics of sometimes frenzied, sometimes subdued human beings - especially when substantial sums of cash get thrown in the mix. It's just one of the unique characteristics of social cultures, and we're all affected at some point or another. Remember that trade you planned out so perfectly, entered so carefully, and then so inexplicably abandoned it when your confidence waivered? We've all been there. To help overcome that recurring possibility, consider the following: 1. Use a trading system that requires you to execute ALL aspects of your plan at the beginning of each trade, not just entry points. 2. Keep a trading log. Even if never revisited for analytical purposes, they provide a written reminder of your ability to stick with your plan. To boot, it's in your own handwriting, which can be pretty persuasive when self-doubt rears its ugly head. 3. Remove actively traded stocks from your trading program's topmost page. That prevents your natural curiosity from lulling you into ticker-tape-fixation, which tends to breed suspicion over each and every tick. Try these ideas for starters, they have been shown to help traders better manage the potential psychological pitfalls of the markets. **************************
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 - 4451.14 September 7, 2023 52-Week High: 4607.07 52-Week Low: 3491.58 Daily Trend: DOWN Weekly trend: DOWN Weekly Pivot Levels Resistance 3: 4743.20 Resistance 2: 4616.93 Resistance 1: 4566.35 Pivot: 4490.66 Support 1: 4440.08 Support 2: 4364.39 Support 3: 4238.12 https://www.prorightline.com/rlch/090723SPX.jpg--ECONOMIC REPORTS AND EVENTS (all times are Eastern): Friday, September 08, 2023: 08-Sep 10:00 am Wholesale inventories 08-Sep 3:00 pm Consumer credit Monday, September 11, 2023: 04-Sep Labor Day holiday Tuesday, September 12, 2023: 05-Sep 10:00 am Factory orders Wednesday, September 13, 2023: 06-Sep 8:30 am U.S. trade deficit 06-Sep 10:00 am ISM services 06-Sep 2:00 pm Fed Beige Book Thursday, September 14, 2023: 07-Sep 8:30 am Initial jobless claims 07-Sep 8:30 am U.S. productivity (revision) 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: "Okay - Where's The Bounce?" RightLine analysts look at a myriad of charts and technical indicators in order to determine the best stocks and entry points. When our research indicates that a "bounce" play has a high probability and potential for profit, our next job is to determine the level at which the bounce is likely to occur. Be aware that a bounce can be "up" from support (similar to a ball bouncing up from the floor), or "down" from resistance (similar to a ball bouncing down from the ceiling). Frequently, the "floor" or "ceiling" from which a bounce will occur is one of our closely watched DMA (Daily Moving Average) lines. Remember, however, that DMAs are dynamic, and constantly move based on each new day's pricing data! With that in mind, when we say to "Buy on a bounce up from support near the 22 DMA (30.50)" what must be taken into consideration is that the DMA may be moving higher. Consequently, when shares pull back three or four trading days later, the bounce will still occur at the 22 DMA - but that DMA may now be up to 32.50! Just make sure you do a quick double- check of where the DMA is located before blindly jumping into a trade - or missing a good entry! ***********************************
STOCKS COVERED IN THIS ISSUE
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CONSUMER CYCLICAL SECTOR Karat Packaging Inc. (KRT: Consumer Cyclical/Packaging & Containers) - NEW HIGH DIP. After setting a recent new 52-week high, KRT shares have since fallen from that peak as traders put some profits in the bank. Thursday's intra-day bounce may very signal that the recent decline is over. Prepare for a continuation of this turnaround and "buy-the-dip" if KRT reaches our BUY trigger set at 26.19. Follow your entry with a trailing stop of 2.91, and tighten to 1.46 on a 2.76 gain. KRT closed Thursday at 25.25. Earnings Report Date: Nov 08, 2023. Beta: 0.92. Market-Cap: 502.172M. Not Optionable. Tempur Sealy International, Inc. (TPX: Consumer Cyclical/Furnishings, Fixtures & Appliances) - NEW HIGH DIP. TPX's recent new 52-week high proves just how well this stock is performing. Sellers have pushed prices down the past few sessions, but Thursday's rebound near support has given us an excellent BUY setup. A continuation of this latest bounce has the potential to push above the recent 52-week high and set a new one. Be ready to get on board if TPX moves up to the 45.84 level, and set a 2.8 trailing stop to control risk. Tighten the stop to 1.4 when you have banked a 1.96-point gain. Earnings Report Date: Nov 01, 2023. Beta: 1.69. Market-Cap: 7.775B. Optionable. MasterCraft Boat Holdings, Inc. (MCFT: Consumer Cyclical/Recreational Vehicles) - 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. MCFT traders reached this state of stand-off on Thursday with the tightest range of the past seven days. You can take advantage of their efforts by placing a low risk BUY trigger at 21.19 and a SELL short trigger at 19.86. After one of the two orders is filled, cancel the un-triggered order and place a trailing stop at 1.33 which can be tightened to 0.67 on a 1.46 gain. MCFT closed Thursday at 20.81. Earnings Report Date: Nov 07, 2023. Beta: 1.82. Market-Cap: 357.988M. Optionable. FINANCIAL SERVICES SECTOR Banco Macro S.A. (BMA: Financial Services/Banks-Regional) - SQUEEZE PLAY. BMA traders on both sides of the fence are now locked in a head-to-head shootout. Thursday's price range was the narrowest in over a week, as neither Bears or Bulls have been able to clearly gain the upper hand. This gives us an opportunity to catch the next directional move with little risk of loss. To do this we'll place both a long and a short trigger with a BUY at 24.62 and a SELL short trigger at 22.84. When one of the orders is filled, cancel the remaining order and enter a 1.78 trailing stop. When you've reached a 2.72 paper profit, tighten the stop to 0.89. BMA closed at 23.90 on Thursday. Earnings Report Date: N/A. Beta: 1.91. Market-Cap: 5.396B. Optionable. INDUSTRIALS SECTOR The AZEK Company Inc. (AZEK: Industrials/Building Products & Equipment) - NEW HIGH DIP. It's no secret that strong stocks tend to get even stronger. AZEK's recent 52-week high is a clear indication that the ongoing uptrend is still healthy, though traders have taken some profits off the table during the past few sessions. Thursday's bounce from support confirms the stock's intention to move even higher. This New High Dip setup takes advantage of the tendency for strong stocks to bounce skyward after pulling back from new highs. Prepare to BUY shares in AZEK should price reach the 33.61 level. Enter a trailing stop of 2.14 as soon as your order is filled, then tighten the stop to 1.07 on a 2.3 gain. Earnings Report Date: Nov 27, 2023. Beta: 1.73. Market-Cap: 4.954B. 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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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 To Unsubscribe, send an email to cs@prorightline.com or call 1-312-248-4241. |