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
This week the S&P 500 continued its recovery with a gain of 2.2%, to close at 4514. The momentum we have discussed in recent weeks continues to build. On the monthly time frame, November has gained an impressive 7.6%, in turn fully recovering the declines we saw in September and October.
On the weekly time frame, price is trading above both the 50 and 200 SMAs (Simple Moving Average). Whilst on the daily time frame, price is also trading above the key moving averages, the 20, 50 and 200 SMAs, however the moving averages are not yet fully aligned. Price is now 29% above the October 2022 lows and, given the return of price above key moving averages mentioned above, we are actively seeking new positions from our watchlist.
We continue to see individual stocks perform well. Our portfolio currently compromises 16 US stocks and 3 currencies. We have compounded a number of these assets, in turn, delivering excellent profit for our Phoenix community members.
The FTSE 100, the UK’s premier index, had its best week since 11th September, gaining 2.0%. However, price remains range bound between 7200 and 7700. On the weekly time frame, price remains below the weekly 50 SMA, but remains above the weekly 200 SMA. Should strength return, the next major area of potential resistance is the pivot high from 17 April at 7936. The all-time high is 8047. We continue to monitor this index, waiting for confirmation of direction.
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 demonstrated a consistent upward trajectory since 2012, making it an appealing stock for long-term investors. Between December 2021 and February 2023, the stock experienced a period of consolidation. However, in March, the stock broke out of this range, resulting in a gain to date of 37%.
With a gain year to date approaching 65%, CDNS is high on our watchlist.
On the weekly time frame, CDNS continues to trade above the 50 and 200 SMAs, indicating positive market sentiment. Our proprietary tool, the Sublime trend filter, remains green, reinforcing the bullish outlook.
Similarly, on the daily time frame, the Sublime trend filter remains green, further evidence of a favourable market sentiment. CDNS is trading above the 20, 50, and 200 SMAs.
Looking ahead, the next notable level of potential resistance is the $300 round number. Should a continuation pattern emerge, our Phoenix community members may find an opportunity in a stock that has yielded very profitable trades in the past.
OUTPERFORMING ASSET FOR THE WATCHLIST
Copart Inc. - CPRT
Copart, Inc. (ticker: CPRT) is a global provider of online vehicle auction and remarketing services to automotive resellers such as insurance, rental car, fleet and finance companies in 11 countries; the US, Canada, the UK, Germany, Ireland, Brazil, Spain, UAE, Bahrain, Oman and Finland. Headquartered in Dallas, Texas, Copart has more than 200 physical locations around the world, where it houses more than 10,000 acres of vehicle inventory.
CPRT concluded the week at $50, resulting in a bullish increase of 3.0% over the past week. Notably, this stock has demonstrated very bullish price action throughout November, boasting an impressive gain of 15.4% to date. Furthermore, CPRT has delivered a significant return of 65% in 2023.
On the weekly time frame, CPRT maintains a trading position above the 50 and 200 SMAs. Our proprietary tool, the Sublime trend filter, continues to display a green signal, reflecting a positive market sentiment. Following a break out above a key pivot level in May, price went into a period of consolidation. Price has now broken out from this area.
On the daily time frame, the Sublime trend filter remains green, underscoring the favourable market sentiment. Furthermore, the stock price continues to trade above the 20, 50, and 200 SMAs.
Looking ahead, the next area of potential resistance is the important $100 round number. A continuation pattern above the current level could offer members of our Phoenix community an opportunity in a stock with a history of long term trends.
Looking Ahead
This week has seen the bulls continue to strengthen their position, resulting in the markets fully recovering from the declines seen in September and October. As long term inventors, patience is a key weapon in our arsenal. Our position is the bulls remain in control, resulting in opportunities for savvy investors, such as those in our Phoenix community.
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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