Welcome to another edition of our weekly newsletter where we provide an overview of the main US and UK indices, a selected asset with deep analysis, and finally, an analysis of an asset we have 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 we have seen modest strength in all three main US indices – S&P 500, Nasdaq 100, and Dow Jones 30. Last week’s weakness has been countered by gains this week of 2.0%, 4.7% and 1.0% respectively. Three weeks ago we described bullishness as a potential bull-trap, which materialised with a decline the following week. And this week may be a similar set-up. A positive point for the bulls is that we may be seeing the signs of a failure of lower highs and lower lows. On another positive note the S&P remains above the previous year’s low at 3663. The Nasdaq looks similarly weak as it continues to trade below last year’s low. Whilst the Dow 30 also remains above the previous year’s low at 29653. Our position remains that we continue to apply patience to assess.
This week the FTSE 100, the UK index, was again volatile, swinging high to low by 4%. On the weekly time frame, price remains above the 200 SMA but below the 50 SMA. On the daily time frame, price is trading above the 20 SMA but below the 50 and 200 SMA.
OUTPERFORMING ASSET FOR THE WATCHLIST
Cigna - CI
Cigna is a stock that we identified as an outperformer in our newsletter on 22 May. The stock has a history of trends, such as in 2013-2015 and 2017. Throughout 2022 this stock has significantly outperformed the US indices with a gain to date of 21% compared to the S&P 500 which has declined 19%.
On the weekly time frame, price is trading above the 50 and 200 SMA, and the Sublime trend filter is green. This week price made a significant move with a gain of 4.2%, resulting in a breakout above a major pivot level.
On the daily time frame, the Sublime trend filter is also green. Price is currently trading above all moving averages. During 2022 price has predominantly been using the zonal area between the 20 and 50 SMA as support. As mentioned above, a major move this week has resulted in a new all-time high at $281.
Looking ahead, we will monitor the current month’s breakout bar. A continuation pattern above the recent all-time high, along with the formation of a linear trend could present opportunities for our Phoenix community members.
OUTPERFORMING ASSET FOR THE WATCHLIST
Eli Lilly And Company - LLY
Eli Lilly And Company is a stock that we identified as an outperformer in our newsletter on 29 May. LLY first floated in 1970; it wasn’t until twenty-five years later that a trend emerged. Since 2007-8 it has been in a long-term trend, gaining some 1200%! Whilst trends historically haven’t been the cleanest, price is currently showing signs of genuine bullishness. Since May the stock has gained over 35% and is trading above last year’s high.
On the weekly time frame, price is trading above the 50 and 200 SMA, and the Sublime trend filter is green. This week price created a new all-time high but the breakout bar wasn’t convincing.
On the daily time frame, the Sublime trend filter is also green. Price is currently trading above all moving averages, which are all aligned. Price is also above the $300 round number which has recently acted as a level of resistance.
Looking ahead, a continuation pattern above the current all-time high could offer our Phoenix community members an opportunity in a very bullish stock. The next area of resistance is the $400 round number.
This week the US and UK indices have again demonstrated volatility. As a result, we need to apply patience and wait for signs of a clear direction. We continue to actively monitor all markets, scanning for opportunities such as the stocks described today, along with the JPY forex pairs, and sharing these with our Phoenix community for good returns.
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Keep it simple. Keep it Sublime.
The ST Team