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 reversed the gain of the previous week, as we continue to see heightened volatility. It was an eventful news week with the US Fed rate decision on Wednesday and monthly job numbers on Friday – and the market reacted wildly following both events. Next week is another important news week with the US inflation report on Wednesday. Whilst, as technical traders, we don’t factor news into our strategy, it is important to be aware of major news events – we share with our Phoenix community our approach to avoiding the trappings of these events.
On the monthly time frame, the S&P 500 has started the month in decline following a gain in October of 7.8%. On the weekly time frame, the S&P 500 declined over the week by 3.8% in turn reversing last week’s gains. Price remains above the 200 SMA but below the 50 SMA. On the daily time frame, price continues to battle with the 20 and 50 SMAs, which is significantly below the 200 SMA. The weakness seen this week has taken price back into the area of consolidation between 3580 – 3800 we discussed last week. 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, whilst to the downside the level to watch is 3580.
This week’s weakness in the S&P 500 was seen across the markets, with declines in the Nasdaq 100 and Dow Jones indices. The Nasdaq 100 declined 6.4% over the week, to close below the weekly 200 SMA. Whilst the Dow Jones declined by a more respectable 1.8% after failing at the 50 SMA. The Dow Jones remains the best performer of the indices.
This week the FTSE 100, the UK index, has an impressive gain of 4.1% to retest the weekly 50 SMA and daily 200 SMA.
OUTPERFORMING ASSET FOR THE WATCHLIST
BAH - Booz Allen Hamilton
Booz Allen Hamilton Holding Corporation (informally Booz Allen) is the parent of Booz Allen Hamilton Inc., an American management and information technology consulting firm, headquartered in McLean, Virginia, in Greater Washington, D.C., with 80 other offices around the globe. The company’s stated core business is to provide consulting, analysis and engineering services to public and private sector organisations and nonprofits.
A relatively new stock floating in 2010, price has been in an uptrend and displayed periods of linearity such as in 2019. Last month price performed very strongly with a gain of 17.9%, to create an all-time high at $110.
On the weekly time frame, price is trading above the 50 and 200 SMA, and the Sublime trend filter is green. Since price found support at a key pivot level at $91 on 27th September, price has gained 17%.
On the daily time frame, the Sublime trend filter is also green. Price is currently trading above all moving averages.
OUTPERFORMING ASSET FOR THE WATCHLIST
PWR - Quanta Services
Quanta Services is an American corporation that provides infrastructure services for electric power, pipeline, industrial and communications industries. Capabilities include the planning, design, installation, program management, maintenance and repair of most types of network infrastructure. Quanta Services employs about 40,000 people. Its operating companies achieved combined revenues of about $11 billion in 2018. It is headquartered in Houston, Texas. In 1998, Quanta went public on the New York Stock Exchange and was added to the S&P 500 index in June 2009.
PWR is a stock our Phoenix community traded very successfully throughout 2020 and 2021 when the stock increased by over 200%. Since October 2021 price action has been mixed. This month price is retesting the previous all-time set in August.
On the weekly time frame, price is trading above the 50 and 200 SMA, and the Sublime trend filter is green.
On the daily time frame, the Sublime trend filter is also green. Price is currently trading above all moving averages, however, the moving averages are not aligned with the 20 SMA below the 50 SMA. Since price retested the 200 SMA on 14th October price has been bullish, gaining 19%.
Looking ahead, we will monitor the current price action. A continuation pattern above the all-time high and the formation of a linear trend could present opportunities for our Phoenix community members in a stock that has delivered a good profit in the past.
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