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. Finally, an analysis of an asset 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 US and UK equity markets have demonstrated continued strength, with the S&P 500 gaining 4.0%, which follows last week’s gain of 4.9%.
On the monthly time frame, the S&P 500 has shown strength with a gain to date of 8.9%, in turn closing back above the previous year’s low. On the weekly time frame, the S&P 500 has confirmed the 50 SMA as support – a level we mentioned to watch in our newsletters over the past three weeks. On the daily time frame, price has broken out of the area of consolidation between 3580 – 3800. Price closed the week trading above the 50 SMA but remains below the 200 SMAs. The outlook for the S&P is to watch for further price action to break out above 4000 and challenge the 200 SMA at 4100.
The recent strength in the S&P 500 was seen across the markets, with gains in the Nasdaq 100 and Dow Jones indices. The Nasdaq 100 gained 2.2% over the week, whilst the Dow Jones gained 5.8%. The Dow Jones is the best performer of the indices, trading above the 200 SMA; for the first time since 19 August.
This week the FTSE 100, the UK index, gained 1.1% and continued its hold above the 200 SMA. The support level at 6788 we mentioned two weeks ago is also holding.
OUTPERFORMING ASSET FOR THE WATCHLIST
Cigna Corporation - 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 45%. Price broke above the previous year’s high in July, and has since been extremely bullish with a gain in October of 17%.
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. On 21st October the 20 SMA crossed the 50 SMA, an indication of near-term bullishness. To date, price has made light work of the $300 round number.
Looking ahead, price made an extremely bullish run in October, and we are waiting to see if this momentum holds. The next area of resistance is the $350 round number. A close above this level and 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 Financial - 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 total performance to date is 14% Return On Capital and 682% Return On Investment, applying a total portfolio risk of 2%.
This stock is a good example of a trending stock in a volatile market. The total amount of time required to set up and manage this trade has been less than three hours over eleven months – 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 approach enables busy professionals the freedom to pursue other interests and avoid hours each day in front of a trading screen.
Looking Ahead
This week the US and UK indices have again demonstrated significant volatility. We continue to monitor all markets actively, 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
