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 continued volatility in all three main US indices – S&P 500, Nasdaq 100, and Dow Jones 30. Last week’s substantial gains were pared back this week with declines of 2.3%, 4.3% and 1.4% respectively. The potential bull trap we mentioned last week played out as we warned investors. With June’s monthly candle now closed, we can fully assess the results. The S&P bounced off the previous year’s low at 3663. The Nasdaq looks weak, trading below last year’s low, with the next area of support around 11000 which coincides with the weekly 200 SMA. The Dow 30 also bounced off the previous year’s low at 29653. We will now apply patience to assess whether the lows of 2021 hold as support.
This week the FTSE 100, the UK index, was volatile but ended the week with a modest decline of 0.6%. On the weekly time frame, price remains above the 200 SMA but below the 50 SMA. Price is trading below the 20, 50 and 200 SMA on the daily time frame.
OUTPERFORMING ASSET FOR THE WATCHLIST
FTI Consulting - FCN
FTI Consulting is a business advisory firm headquartered in Washington, D.C., United States. FTI is one of the largest financial consulting firms in the world and consistently ranks as one of the top global management consulting firms. The company specialises in the fields of corporate finance and restructuring, economic consulting, forensic and litigation consulting, strategic communications and technology. The firm was involved in the Lehman Brothers and General Motors bankruptcies, the investigation into the Bernard Madoff fraud, Bush v. Gore, and the Major League Baseball steroid investigation. As of January 2020, FTI Consulting had the largest restructuring business in the US.
FCN is a stock that was first floated in 1996. The stock has displayed periods of strong trends, such as in 2007, 2018 and 2019. More recently, following a break above last year’s high in March this year, price has been bullish with a gain to date of 18%.
On the weekly time frame, the Sublime trend filter is green. Price is trading above the 50 and 200 SMA. On the daily time frame below, price is trading above the 20, 50 and 200 SMA, and the Sublime trend filter is also green. This week, price created an all-time high at $185. This stock is a clear outperformer when compared to the broad market decline throughout 2022. The next area of resistance is $200. We will update our Phoenix community should opportunities arise in a bullish stock with a history of strong trends.
We last wrote about MCK in our newsletter on 15th May. MCK is a stock with a history of trends. The June candle is now closed and has displayed a strong rejection of lower prices. The bulls took back control in the latter part of June, with an in-month gain of nearly 10%. Price is currently very close to the all-time high of $340. We will apply patience and wait for a break out to confirm the recent momentum.
We first entered MCK in early January and have since compounded three times to have four positions in total. The total return to date is 6% using a total risk of 2%. This stock is a good example of trending stocks in a volatile market. The total amount of time required to set up and manage this trade has been less than one hour over six months – this is the benefit of trend trading; using higher time frames such as monthly and weekly charts avoids the noise and stress of shorter time frames. This approach enables busy professionals the freedom to pursue other interests and avoid hours each day in front of a trading screen.
This week the markets 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 selected stocks and 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