Welcome to another edition of our weekly newsletter where we provide an overview of the main US and UK indices, a specifically selected outperforming asset with deep analysis, and finally, an analysis of an asset we have in our portfolio, including a discussion on the returns the asset is generating for our Phoenix members.
Let’s get into this week’s newsletter!
US & UK INDICES OVERVIEW
This week the markets have countered the decline of previous weeks, as the bulls fought back. On the monthly time frame, the S&P 500 continues to trade within a large channel from the high in January. A close above the high in June and July at 4200 would also represent a break out of the channel. The S&P 500 is trading above the 4000 round number, after failing at this level along with the daily 50 SMA last week. On the daily time frame, this week price closed above the 50 SMA but is trading below the 20 and 200 SMA.
The bullish momentum has also been seen in the Nasdaq 100 and Dow Jones indices. Consistent movements across all indices give us confidence in the movement.
Our position remains unchanged; we continue to seek opportunities but remain vigilant.
This week the FTSE 100, the UK index, has gained a modest 1.0%. On the weekly time frame, price strengthened but couldn’t close above the 50 SMA. As mentioned last week, price remains in a range between the all-time high at 7687 and the weekly SMA, currently at 6945. On the daily time frame, the weakness in price last week has been reversed by the bulls, resulting in price closing above the 50 SMA; price remains below the 20 and 200 SMA. As with the US indices, we are actively looking for opportunities but stay vigilant.
OUTPERFORMING ASSET FOR THE WATCHLIST
Cigna - CI
Cigna is a stock that has a history of trends, such as in 2013-2015 and 2017. Throughout 2022 this stock has significantly outperformed the US indices with a gain to date of 28%. Following June’s indecision candle, price has since been bullish, with an all-time high printed this week at $295.
On the weekly time frame, the price is trading above the 50 and 200 SMA, and the Sublime trend filter is green. Whilst on the daily time frame the Sublime trend filter is also green. Price is currently trading above all moving averages, which are all aligned. During 2022, except for a brief period in June, price has been using the zonal area between the 20 and 50 SMA as support.
Looking ahead, price is facing potential resistance with the $300 round number. A close above this level, along with the formation of a linear trend, could present opportunities for our Phoenix community members in a stock we have traded for excellent returns in the past.
PERFORMANCE REVIEW
Ameriprise - AMP
Ameriprise is a stock with a history of trends over the past 10 years. These trends, such as 2013 and 2020 have been linear and predictable.
We first entered AMP in December 2020 and have since compounded on multiple occasions. The return to date on total portfolio value exceeds 9% using a total risk of just 2%. This stock is a good example of the value of using historic price action as a guide to possible future trends.
The total amount of time required to set up and manage this trade has been less than three hours over nearly two years – this is the benefit of trend trading; using higher time frames such as monthly and weekly charts avoids the noise and stress of shorter time frames. This is the value in trend trading for professionals that don’t wish to spend hours each day in front of a trading screen, scalping for small gains whilst risking large amounts of capital.
Looking Ahead
This week the US and UK indices have rebounded, as broad volatility in 2022 continues. As mentioned in previous weeks, price never moves in a straight line. We continue to actively monitor all markets, scanning for opportunities such as the stocks described today, along with the JPY forex pairs and Dollar strength, and sharing these with our Phoenix community for excellent returns.
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Keep it simple. Keep it Sublime.
The ST Team
