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
Positive Momentum Continues with Bullish June Performance
The S&P 500 closed the week at $4282, reflecting a strong 1.8% increase over the past week. Moreover, the index has commenced the month of June with bullishness, accumulating a gain of 2.4% to date. While May concluded with a modest gain of 0.2%, the overall performance in 2023 has been impressive, delivering a substantial return of 11.4%.
At Sublime Trading, our proven methodology revolves around a successful approach that prioritises factual evidence; market prices dictate our actions.
The S&P 500’s all-time high stands at $4820. Currently, the index is trading 11.2% below this peak level. However, despite the deviation, the positive performance throughout the year remains encouraging, demonstrating the potential for continued growth.
Analysing the weekly time frame, the S&P 500 continues to exhibit strength. The index remains above both the 50 and 200 SMAs, suggesting a positive market sentiment. Our proprietary tool, the Sublime trend filter, remains green, reaffirming the favourable conditions.
Switching to the daily time frame, the positive momentum of the S&P 500 persists. The Sublime trend filter also maintains a green signal, and the index is trading above all moving averages.
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 in April, and since then the stock has been bullish, gaining over 8%. On both the weekly and daily timeframes the moving averages are aligned, and we await a breakout above the all-time high of $177 to dictate our next move. The next area of resistance is the $200 round number.
The total performance to date is a 656% Return On Investment and 13% 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 seven hours over sixteen 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.
OUTPERFORMING ASSET FOR THE WATCHLIST
Ametek Inc. - AME
AME: Promising Signals Point to Potential Investment Opportunities
AMETEK, Inc. (ticker: AME) is an American multinational conglomerate and global designer and manufacturer of electronic instruments and electromechanical devices with headquarters in the United States and over 220 sites worldwide. The company was founded in 1930. AMETEK has been ranked as high as 402 on the Fortune 500. The firm has also consistently been on the Fortune 1000 rankings list as well as the Fortune Global 2000.
AME’s remarkable long-term growth, coupled with its history of bullish periods, positions it as an attractive stock for our Phoenix Community. Recent developments, including the attainment of a new all-time high and its strong performance in June, signal the possibility of further upward trends.
AME is a stock that has showcased an impressive long-term growth trajectory since March 2004, with gains surpassing a remarkable 1500%. Furthermore, its history is punctuated by several bullish periods, such as 2011-13, 2017-19, and 2020-21.
At the close of the week, AME concluded trading at $151, representing a 2.0% increase over the past week. Its bullish behaviour has been particularly evident throughout June, with a gain to date of 4.1%. In the larger context of 2023, AME has delivered an impressive return of 7.9%.
On the weekly time frame, AME continues to display positive indications. The stock remains above both the 50 and 200 SMAs, highlighting its strength in the market. Additionally, our proprietary tool, the Sublime trend filter, maintains a green signal, suggesting a favourable environment for investors. The alignment of the moving averages further reinforces the positive outlook. Notably, after a temporary pullback to the 200 SMA in June 2022, AME has rebounded strongly, with a noteworthy gain of 42%.
On the daily time frame, similar optimistic signs emerge. The Sublime trend filter also remains green, emphasising the continued positive market sentiment. Furthermore, AME is trading above the 20, 50, and 200 SMAs, further bolstering its near-term strength. The alignment of the moving averages corroborates the stock’s positive momentum.
Looking ahead, it is important to identify key levels of potential resistance. For AME, the next notable milestone is the $200 round number. If the stock manages to maintain a continuation pattern above its all-time high, our analysis suggests that a long-term trend may emerge.
Looking Ahead
The S&P 500 has demonstrated resilience and maintained positive momentum, offering promising opportunities for traders and investors. The index’s bullish performance to commence June and its notable gains in 2023 reflect a favourable market environment. While the all-time high remains a target to be surpassed, the S&P 500’s current position and strong market indicators indicate the potential for continued growth.
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
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