Welcome to our weekly newsletter where we provide an overview of the main US and UK indices, along with analyses of selected stocks that are outperforming the market.
Let’s get into this week’s newsletter!
US & UK INDICES OVERVIEW
S&P 500 Closes 2023 Half Year With Strong Performance
Last week marked the completion of the half year and the S&P 500 had one of its best performances with a gain of 15.8%. This performance is against a backdrop of ‘experts’ calling market tops, recession, and impacts of inflation, which all resulted in noise and had no influence on the S&P 500’s performance.
In this week’s newsletter we focus on the performance of two stocks we currently have in our portfolio, ABC and HUBB, and demonstrate the power of investing with the trend, along with how compounding can supercharge your returns.
At Sublime Trading, our proven methodology revolves around a successful approach that prioritises factual evidence; market prices dictate our actions.
Last week we mentioned the likely pullback in the S&P 500 to the August high at 4325 and for that level to act as support. And that’s exactly what happened, with a bounce last week and subsequent gain resulting in the S&P 500 closing at its highest level since March 2022.
The month of June has now closed and the bullish trend in the S&P 500 has resulted in an impressive gain of 6.5% in the month. On the weekly time frame, the S&P 500 continues to trade above both the 50 and 200 SMAs. Whilst on the daily time frame, last week price rebounded off the 20 SMA, to resume the bull trend. Our proprietary tool, the Sublime trend filter, remains green on both the weekly and daily time frames, providing additional confirmation of the index’s positive conditions.
The FTSE 100, the UK’s premier index, closed the week with a gain of 0.9%, closing at 7559. Price has back above the 50 SMA, and remains above the 200 SMA.
PERFORMANCE REVIEW
AmerisourceBergen Corporation - ABC
AmerisourceBergen Corporation (ABC) is a significant player in the drug wholesale industry, providing comprehensive drug distribution and consulting services for medical business operations and patient care. Following the merger of Bergen Brunswig and AmeriSource in 2001, the company has continued to expand its reach by distributing a wide range of brand name and generic pharmaceuticals, over-the-counter healthcare products, and home healthcare supplies and equipment to healthcare providers across the United States. With a strong foothold in the market, AmerisourceBergen is responsible for about 20% of all pharmaceuticals sold and distributed in the US.
We first entered ABC in February 2022, compounding on multiple occasions. We last wrote about this stock on 3 June where our ROI was 656%. Since then the stock has been bullish, gaining over 9%. On both the weekly and daily timeframes the moving averages are aligned, and we await to see how price responds to potential resistance at the $200 round number, to dictate our next move.
The total performance to date is a 1,054% Return On Investment and 21% Return On Capital, applying a full 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 7 hours over 17 months – this is the benefit of trend trading; using higher time frames such as monthly and weekly charts to avoid 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.
PERFORMANCE REVIEW
Hubbell Inc. - HUBB
Hubbell Incorporated (ticker: HUBB) is an American company that designs, manufactures, and sells electrical and electronic products for non-residential and residential construction, industrial, and utility applications. Hubbell was founded in 1888, and is ranked 602 by Fortune.
We first entered HUBB in May, compounding on multiple occasions. Price broke above a key pivot level in April and has formed a bullish trend, gaining an impressive 24%. On both the weekly and daily timeframes the moving averages are aligned. The next area of potential resistance is the $400 round number.
The total performance to date is a 397% Return On Investment and 4% Return On Capital, applying a full portfolio risk of 2%.
HUBB is a good example of how a stock can form a bullish trend following a breakout from a key resistance level. The total amount of time required to set up and manage this trade has been less than 2 hour2 over 2 months – this is the benefit of trend trading; using higher time frames such as monthly and weekly charts to avoid the noise and stress of shorter time frames.
Looking Ahead
The pullback we anticipated materialised and the S&P 500 has continued its bullish trend. As informed investors that understand market dynamics such as pullbacks, our Phoenix Community continues to profit from sensible investing.
At Sublime, our unwavering commitment lies in conducting thorough analysis based on objective data and factual evidence presented in the charts. By adopting this approach, we aim to provide valuable guidance to our esteemed Phoenix community, collectively exploring opportunities that hold the potential for long-term, profitable trades.
Keep it simple. Keep it Sublime.
The ST Team
