Welcome to another edition of our weekly newsletter where we provide an overview of the main US and UK indices, a selection of outperforming assets 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 has witnessed renewed strength in the US indices. The week prior displayed weakness. Whilst we have seen swings week to week in strength and weakness, there are signs the US indices may be finding a bottom. However, we need to be mindful and aware of the differences between subtle shifts and real progress in the market recovery. With the earnings season currently underway, we also need to be aware of volatility. Once again, our position is that patience is the best strategy at this time.
This week the FTSE 100, the UK index, gained 1.6% but failed at the weekly 50 SMA. Price remains above the weekly 200 SMA. On the daily time frame, price is trading above the 20 SMA but below the 50 and 200 SMA; price is in a range between 7000 – 7345 which commenced on 13 June. Again, we will maintain vigilance and patience until we see a clear direction in the index.
OUTPERFORMING ASSET FOR THE WATCHLIST
DLTR - Dollar Tree
Dollar Tree is an American multi-price-point chain of discount variety stores. Headquartered in Chesapeake, Virginia, it is a Fortune 500 company and operates 15,115 stores throughout the 48 contiguous U.S. states and Canada. Its stores are supported by a nationwide logistics network of 24 distribution centres. Additionally, the company operates stores under the name of Dollar Bills, as well as a multi-price-point variety chain under the Family Dollar banner.
The long-term trend in this stock is mixed with periods of strength such as 2010-2012. However, there are also deep pullbacks and erratic price movements on the monthly chart. Price in July has been particularly bullish resulting in a gain to date of 10.4%.
On the weekly time frame, price is trading above the 50 and 200 SMA, and the Sublime trend filter is green. This week price has displayed continued strength and is close to the all-time high at $177.
On the daily time frame, the Sublime trend filter is also green. Price is currently trading above all moving averages, and the moving averages are diverging.
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.
OUTPERFORMING ASSET FOR THE WATCHLIST
BAH - Booz Allen Hamilton
Booz Allen Hamilton Holding Corporation (informally Booz Allen) is the parent of Booz Allen Hamilton Inc., an American management and information technology consulting firm, headquartered in McLean, Virginia, in Greater Washington, D.C., with 80 other offices around the globe. The company’s stated core business is to provide consulting, analysis and engineering services to public and private sector organisations and nonprofits.
A relatively new stock floating in 2010, price has been in an uptrend and displayed periods of linearity such as during 2019. This month price has broken above a very strong level of resistance at $91. Commencing in May price has had three months of strong gains of 5.2%, 5.2% and 4.3% respectively.
On the weekly time frame, price is trading above the 50 and 200 SMA, and the Sublime trend filter is green. This week price bounced off the $91 level which could now be considered resistance turned support.
On the daily time frame, the Sublime trend filter is also green. Price is currently trading above all moving averages and, similar to DLTR, the moving averages are diverging.
Looking ahead, we will monitor the current price action. The all-time high is $100 – the result of a price spike in January 2021. Given the proximity of price to the $100 round number and the all-time high, this is a level to pay respect to. A continuation pattern above this level, along with the formation of a linear trend, could present opportunities for our Phoenix community members.
Looking Ahead
This week the US and UK indices have again demonstrated short-term strength. However, the markets are generally volatile and we need to continue 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 Dollar strength, and sharing these with our Phoenix community for good returns.
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Keep it simple. Keep it Sublime.
The ST Team
