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 ended the week at 5751, recording a modest gain of 0.2% and achieving a new closing high. The index has now advanced 12.5% since its August lows. On a monthly basis, September closed with a 2.0% gain, marking the fifth consecutive month of growth, and ten out of the last eleven months have delivered positive returns.
Year to date, the S&P 500 has delivered an impressive 21% gain. Despite recent volatility, bullish momentum remains strong, with the index up 39% from its October 2023 low and 62% from its October 2022 low.
While broad indices such as the S&P 500 offer a general view of the market, they do not fully capture individual stock performance. We continue to see notable outperformance from specific stocks, including PGR, UNH, KO, and MMC, which we have highlighted in recent months.
The Nasdaq 100 extended its gains from last week, rising by 0.1%, while the Dow Jones also increased by 0.1%, setting a new all-time high close.
In the UK, the FTSE 100 declined by 0.5%, closing at 8281. After surpassing its all-time high in April, the index has been consolidating between 8100 and 8300 since June. Despite showing signs of strength, it has returned to this consolidation range.
OUTPERFORMING ASSET FOR THE WATCHLIST
Caterpillar Inc. – CAT
Caterpillar Inc. (ticker: CAT) is an American Fortune 500 corporation and the world’s largest construction-equipment manufacturer. Caterpillar traces its origins to the 1925 merger of the Holt Manufacturing Company and the C. L. Best Tractor Company, creating a new entity, California-based Caterpillar Tractor Company. In 2018, Caterpillar was ranked number 65 on the Fortune 500 list and number 238 on the Global Fortune 500 list.
CAT has a strong history of trending phases, notably during 2016-2018 and 2020-2021. However, in the latter half of 2021 and throughout 2022, the stock traded within a broad range. In 2023, CAT made two unsuccessful attempts to break out of this range. This year, after successfully breaking above last year’s high, the stock’s performance has become more favourable, with a year-to-date gain of 32%. September was particularly strong, with a 9.8% increase, leading to a new all-time high.
On the weekly time frame, CAT is trading above both the 50 and 200 SMAs, and our proprietary Sublime trend filter is showing green, reinforcing a positive outlook.
On the daily time frame, the stock is exhibiting a linear upward trend, trading above the 20, 50, and 200 SMAs, with the moving averages aligned and diverging—an indicator of near-term strength.
Looking ahead, the next significant area of potential resistance is the $400 round number. Given the favourable price action across all time frames, CAT appears poised for another extended trend, which could present attractive opportunities for our Phoenix community members, particularly given our past success trading this stock.
OUTPERFORMING ASSET FOR THE WATCHLIST
Fiserv Inc. – FI
Fiserv Inc. (ticker: FI) is an American multinational company that provides financial technology services to clients across the financial services sector, including: banks, thrifts, credit unions, securities broker dealers, mortgage, insurance, leasing and finance companies, and retailers. In October 2015, Fiserv, Inc. was ranked third by revenue among technology providers to U.S. banks.
FI is well-known for its history of linear trends. Following a breakout in February 2012, the stock displayed a highly consistent upward trend until the market disruption caused by Covid. From that point until November 2023, FI remained within a broad consolidation range. However, in November last year, the stock broke out and established a new trend, subsequently gaining over 43% and reaching an all-time high.
In early August, we highlighted this breakout in our newsletter, noting the emerging trend. Since then, FI has continued to form a linear trend, posting an additional 15% gain.
On the weekly time frame, FI remains above both the 50 and 200 SMAs, and our proprietary Sublime trend filter continues to display a green signal, reinforcing the bullish outlook.
On the daily time frame, the Sublime trend filter also remains green, with the price trading above the 20, 50, and 200 SMAs. The stock has been consistently using the 20 SMA as a support level, indicating strong near-term momentum.
Looking ahead, the $200 round number represents the next potential resistance level. Should the trend continue, FI could present an attractive opportunity for our Phoenix community, given its strong track record of sustained, linear trends.
Looking Ahead
This week, U.S. markets continued to build on the recovery from the weakness seen in August. Many stocks are now reaching new all-time highs, a development we have highlighted frequently in this newsletter. As we have previously discussed, our measured and disciplined approach has proven highly effective, with our positions benefiting from the sustained positive market momentum. The gains in trending stocks have further enhanced the profitability of our open positions, reinforcing the strength of our strategy.
We currently hold positions in a significant number of stocks displaying robust trends. As always, we will remain focused on allowing price action to guide our decisions, ensuring alignment with market dynamics and positioning ourselves to capitalise on emerging opportunities.
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
P.S. Answer 21 rapid-fire questions about your investing approach and then as if by magic, we will give you recommendations that are right for you and you’ll unlock your FREE Bonuses that will improve your investing results over the next 3 to 5 years.
