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
The S&P 500 continues to display signs of strength and momentum. However, with price below the weekly 50 SMA, we remain active and vigilant – searching for the best opportunities, yet respectful of the volatility seen throughout 2022.
On the monthly time frame, the November candle has now closed with a gain of 5.5%. At times in the month, weakness resulted in a decline of 4.5% – demonstrating we should always await the close of a candle before making a full assessment, regardless of the time frame. Since the market low on 13th October, price has gained 17.0%. On the weekly time frame, the S&P 500 gained 0.9%; as mentioned above, price remains below the 50 SMA. On the daily time frame, price is now trading above the 200 SMA. As discussed last week, this is an important development – we wait to see if this level holds and if the 200 SMA can act as support. A failure of this level could see the bears wrestle back control.
The Nasdaq 100 gained 1.7% for the week. Whilst the Dow Jones was flat across the week.
This week the FTSE 100, the UK index, gained 1.0%, to close at its highest level since May.
OUTPERFORMING ASSET FOR THE WATCHLIST
Coca-Cola - KO
Coca-Cola, informally known as Coke, is a carbonated soft drink manufactured by the Coca-Cola Company. Originally marketed as a temperance drink and intended as a patent medicine, it was invented in the late 19th century by John Stith Pemberton in Atlanta, Georgia. In 1888, Pemberton sold Coca-Cola’s ownership rights to Asa Griggs Candler, a businessman, whose marketing tactics led Coca-Cola to its dominance of the global soft-drink market throughout the 20th and 21st centuries.
KO is a stock with a history of long-term trends, such as between 1989-1992 and 1994-1998. Recently the stock has continued higher but the quality of the trend hasn’t been as clean as we would ideally like. Following the break above last year’s high in October, price has displayed strength gaining 8.0%.
On the weekly time frame, the price is trading above the 50 and 200 SMA, and the Sublime trend filter is green. Whilst 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
Cigna Corporation - CI
Cigna is an American multinational managed healthcare and insurance company based in Bloomfield, Connecticut. Its insurance subsidiaries are major providers of medical, dental, disability, life and accident insurance and related products and services. The company ranked No. 12 in the 2021 Fortune 500 list of the largest United States corporations by total revenue.
CI is a stock that 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 42%. Price broke above the previous year’s high in July, and has since been extremely bullish with a gain of 19%.
On the weekly time frame, price is trading above the 50 and 200 SMA, and the Sublime trend filter is green. Whilst on the daily time frame the Sublime trend filter is also green. Price is currently trading above all moving averages, which are all aligned.
Looking ahead, price made an extremely bullish run in October, then initially weakened in November following earnings to then fully recover. We now wait to assess whether this momentum will continue. The next area of resistance is the $350 round number. A close above this level and the formation of a linear trend could present opportunities for our Phoenix community members in a stock we have traded for excellent returns in the past.
This week the US and UK indices have continued modestly higher. We continue to monitor all markets actively, scanning for opportunities such as the stocks described today, along with the JPY forex pairs, and sharing these with our Phoenix community for excellent returns.
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Keep it simple. Keep it Sublime.
The ST Team