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 closed the week at 5505, experiencing a weekly decline of 2.0%. This marks the first weekly decline in eight weeks, the last occurring on May 28. Such a prolonged bullish run has not been seen since the October 2023 low. Despite this, the monthly candle remains positive, with a gain of 0.8% to date. As price has closed below the daily 20 SMA, the next support levels to monitor are the daily 50 SMA and the pivot high from March 28 at 5265.
The Nasdaq 100 underperformed with a weekly decline of 4.0%, while the Dow Jones Index reached an all-time high before weakening on Thursday and Friday.
Year to date, the S&P 500 has gained an impressive 16%. Despite this week’s weakness, the bullish momentum in the equity markets remains robust, with the S&P 500 surging 33% since the October 2023 low and 56% since the October 2022 low.
We continue to see individual stocks perform well. Our portfolio currently comprises over 20 US stocks, including LLY, AMP, META, NVDA and MCK. We have compounded these assets on multiple occasions, resulting in excellent profit for our Phoenix community members.
The FTSE 100, the UK’s premier index, declined by 1.2% over the week, closing at 8156. After breaking out above it’s all-time high in April, the price has now returned to a range between 8100 and 8300.
OUTPERFORMING ASSET FOR THE WATCHLIST
Coca-Cola – KO
Coca-Cola, manufactures, sells and markets soft drinks including Coca-Cola, other non-alcoholic beverage concentrates and syrups, and alcoholic beverages. Its stock is listed on the NYSE and is part of the DJIA and the S&P 500 and S&P 100 indexes. Invented in the late 19th century, it was originally marketed as a temperance drink and intended as a patent medicine. In 1888 it was sold 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. Today it has become a world leader with global revenue of $46 billion, with over 79,000 employees.
KO has a history of long-term trends, notably between 1989-1992 and 1994-1998. Since 2013, the stock has continued to rise, though the quality of the trend has not been as ideal. The all-time high of $67 was reached in April 2022. This month, however, the stock is on track for a record close. Since forming a bullish reversal monthly candle in October 2023, the price has increased over 16% across nine consecutive months of gains.
On the weekly timeframe, KO is trading above the 50 and 200 SMAs, with the Sublime trend filter indicating a strong upward trend. The daily timeframe also shows the Sublime trend filter in green, and the price is currently above all moving averages. Since the earnings report on April 30, the price has been making a series of higher highs and higher lows, using the 50 SMA as support.
Looking ahead, a close above the all-time high of $67, coupled with the formation of a linear trend, could present opportunities for our Phoenix community members.
OUTPERFORMING ASSET FOR THE WATCHLIST
UnitedHealth Group Inc. – UNH
United Health Group Incorporated is an American multinational managed healthcare and insurance company based in Minnetonka, Minnesota. It offers health care products and insurance services. UnitedHealth Group is the world’s eighth-largest company by revenue and second-largest healthcare company behind CVS Health by revenue, and the largest insurance company by net premiums. UnitedHealthcare revenues comprise 80% of the Group’s overall revenue. The company is ranked 8th on the 2021 Fortune Global 500. UnitedHealth Group has a market capitalization of $400.7 billion as of March 31, 2021.
The long-term trend in this stock is remarkable, perhaps second only to Microsoft for long-term linearity. Between July 2013 and December 2018, and again from May 2020 to January 2023, this stock displayed strong long-term trends. However, since then, it has been in a broad consolidation range between $450 and $550. This month, the price has been bullish, with an 11% gain to date, resulting in an all-time high.
On the weekly timeframe, the price is trading above the 50 and 200 SMAs, and our proprietary Sublime trend filter is green. Following a rejection of the 200 SMA in April, the price has gained over 27%.
On the daily timeframe, the Sublime trend filter is also green, and the price is currently trading above all moving averages. On Friday, the 20 SMA crossed above the 50 SMA, resulting in full alignment of the moving averages.
Looking ahead, we will monitor the current price action. A continuation pattern above the all-time high, along with the formation of a linear trend, could present opportunities for our Phoenix community members.
Looking Ahead
Despite this week’s performance, the overall strength in U.S. equity markets remains intact—a single week does not constitute a trend reversal. Consequently, we are maintaining all positions in U.S. stocks, which are benefiting significantly from this momentum. As always, we will let price action guide our next move.
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.
