Welcome to our weekly newsletter where we provide an overview of the main US and UK indices, along with analyses of selected assets that are outperforming the market.
Let’s get into this week’s newsletter!
US & UK INDICES OVERVIEW
The S&P 500 concluded the week at 6051, posting a modest decline of 0.6%. As the markets transition into a traditionally quieter period, U.S. equities may take a pause following their impressive performance this year. As always, our approach remains guided by price action, ensuring our decisions align with prevailing trends.
Year-to-date, the S&P 500 has delivered an exceptional return of 27%, rising 47% from its October 2023 low and 72% from its October 2022 low.
While indices like the S&P 500 provide a broad overview of market performance, they can often obscure the remarkable gains achieved by individual stocks. This year, stocks such as NVDA, FI, PWR, ORCL, MMC, PGR, WRB, BSX, WMT, GDDY, and RSG have been key highlights in this newsletter, frequently identified before their substantial upward trends became widely recognised.
Among other U.S. indices, the Nasdaq 100 continued to exhibit strength, advancing 0.7% this week to reach a new all-time high. In contrast, the Dow Jones recorded a weaker performance, declining by 1.8% over the same period.
In the UK, the FTSE 100 ended the week at 8300, a slight decrease of 0.1%. The index remains confined within its broader consolidation range, oscillating between 8000 and 8400.
OUTPERFORMING ASSET FOR THE WATCHLIST
Apple Inc. – AAPL
Apple (ticker: AAPL) needs little introduction; the market leader in personal computers, mobile devices and software. Apple is the world’s largest technology company by revenue, with US$394.3 billion of revenue in 2022. It is also considered as one of the big five American information technology companies, alongside Alphabet (parent company of Google), Amazon, Meta Platforms, and Microsoft.
AAPL has demonstrated an exceptional long-term trend since October 2010, delivering gains exceeding 2,300%. While the stock exhibited strong bullish momentum throughout 2021, it encountered a period of weakness in 2022. However, in 2023, the bulls regained control, driving the price to an all-time high in July before entering a period of consolidation. In June, AAPL broke above its 2022 high and has since established a strong upward trend, culminating in a fresh all-time high this month.
The stock closed the week at $248, trading above all key moving averages on both the weekly and daily time frames. Additionally, our proprietary tool, the Sublime trend filter, signals green across both time frames, reinforcing the bullish outlook.
Looking ahead, the $300 round number emerges as the next significant resistance level. Should AAPL establish a continuation pattern above this level, it may present an opportunity for Phoenix community members to capitalise on a stock with a proven track record of long-term growth.
OUTPERFORMING ASSET FOR THE WATCHLIST
Cadence Design Systems Inc. – CDNS
Cadence Design Systems, Inc. (ticker: CDNS) is an American multinational computational software company, founded in 1988 by the merger of SDA Systems and ECAD, Inc. The company develops software, hardware and intellectual properties (IP) used to design chips, systems and printed circuit boards, as well as IP covering interfaces, memory, analogue, SoC peripherals, data plane processing units, and verification.
CDNS has exhibited a consistent upward trend since 2012, establishing itself as a strong contender for long-term investors. After a period of consolidation from December 2021 to February 2023, the stock broke out in March 2023, delivering an impressive 50% gain to date. As such, CDNS remains a priority on our watchlist.
On the weekly time frame, CDNS continues to trade above the 50 and 200 SMAs, reflecting sustained bullish sentiment. Our proprietary tool, the Sublime trend filter, also signals green, reinforcing the positive outlook. Last week, the price made an attempt to surpass the pivot high at $330 but retreated to the daily 20 SMA after encountering resistance.
Similarly, the daily time frame reflects a favourable market position. The Sublime trend filter remains green, and the stock is trading above the 20, 50, and 200 SMAs, signalling continued strength in the near term.
Looking ahead, we will closely observe the price action to determine whether CDNS can retest and break through the all-time high of $329. A continuation pattern above this level could present a compelling opportunity for our Phoenix community members in a stock that has delivered highly profitable trades in the past.
Looking Ahead
The U.S. equity markets continue to exhibit strength, driving equities higher in line with established trends.
Our disciplined, data-driven approach consistently yields strong performance. Even during short-term pullbacks, our portfolio remains strategically aligned, leveraging the momentum of trending stocks and underscoring the resilience of our trend-following strategy.
With a diversified portfolio of stocks displaying solid upward trends, we remain steadfast in allowing price action to guide our decisions. This commitment ensures agility in adapting to shifting market dynamics while maintaining readiness to capitalise on emerging opportunities with confidence.
At Sublime, we are dedicated to detailed, objective analysis driven by chart-based data and evidence. This focus allows us to support our Phoenix community in identifying potential for sustained, profitable trades.
We’ll be back with your next stocks newsletter on January 11th, 2025. Wishing you a happy Christmas break and a great start to the new year! Thank you for supporting our newsletter and we look forward to sharing more top-performing stocks with you soon.
Keep it simple. Keep it Sublime.
The ST Team
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