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 5738, up 0.6%, achieving new all-time intraday and closing highs. The index has now gained 12% since its August lows. This month is proving to be another strong period, with a gain to date of 1.6%, following monthly increases since May.
Year to date, the S&P 500 has posted an impressive 21% gain. Despite recent volatility, bullish momentum continues, with the index up 39% from its October 2023 low and 62% from its October 2022 low.
While broad indices like the S&P 500 provide a general market outlook, they do not tell the full story. We continue to observe notable outperformance from individual stocks such as PGR, UNH, KO, and MMC – all of which we have highlighted in recent months.
The Nasdaq 100 extended last week’s gains, rising by 1.1%, while the Dow Jones increased by 0.6%, reaching another all-time high.
In the UK, the FTSE 100 gained 1.1%, closing at 8321. After surpassing its all-time high in April, the index has been consolidating between 8100 and 8300 since June. Despite showing signs of strength, it has re-entered this consolidation range.
OUTPERFORMING ASSET FOR THE WATCHLIST
Fortinet Inc. – FTNT
Fortinet (ticker: FTNT) is a cybersecurity company with headquarters in Sunnyvale, California. The company develops and sells security solutions like firewalls, endpoint security and intrusion detection systems. Fortinet has offices located all over the world. Brothers Ken Xie and Michael Xie founded Fortinet in 2000. The company went public in November 2009.
FTNT has demonstrated a history of sustained long-term trends, particularly evident throughout 2021. Since then, the stock has been consolidating within a broad range, including a false breakout in July 2023 and multiple rejections at the $50 level. However, the bulls regained control in August, with the stock posting a 32% gain, and this positive momentum has continued into September, with a further 1% increase to date.
On the weekly time frame, the price rebounded from the 50 SMA on 5 August. Our proprietary Sublime trend filter has turned green, reinforcing a bullish outlook.
On the daily time frame, the price is trading above all major moving averages, which are now fully aligned. The Sublime trend filter also remains green, further supporting the bullish sentiment.
Last month’s strong performance has brought the price close to the all-time high of $81.24. A breakout above this level could signal a significant opportunity, given Fortinet’s proven track record of long-term trends.
OUTPERFORMING ASSET FOR THE WATCHLIST
Booz Allen Hamilton – BAH
Booz Allen Hamilton Holding Corporation (informally Booz Allen) (ticker: BAH) 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.
BAH, which floated in 2010, has shown consistent upward momentum, with notable periods of linear growth, such as in 2019.
This week, BAH closed at $162, marking a new all-time high. Since breaking above the $100 level in June, the stock has remained firmly bullish, delivering a 48% gain.
On the weekly time frame, BAH continues to trade above both the 50 and 200 Simple Moving Averages (SMAs), signalling a positive outlook. Additionally, our proprietary Sublime trend filter remains green, further reinforcing the bullish sentiment.
On the daily time frame, the Sublime trend filter also continues to show green, indicating sustained positive momentum. The price is trading above the 20, 50, and 200 SMAs. Following a gap down to the daily 200 SMA after the latest earnings report, the stock has since recovered, gaining 16%.
Looking forward, the next key resistance level to watch is the $200 round number. A continuation pattern above the all-time high could present a strong opportunity for our Phoenix community members, given BAH’s established long-term bullish trend.
Looking Ahead
This week, U.S. markets continued their rebound from the earlier weakness experienced in August. As previously mentioned, our measured and disciplined approach has proven effective, with our positions benefiting from the sustained positive momentum in the markets. The gains in trending stocks have further enhanced the profitability of our open positions, affirming the strength of our strategy.
We currently hold positions in a significant number of stocks displaying robust trends. As always, we will remain focused on allowing price action to guide our decisions, ensuring alignment with market dynamics and positioning ourselves to capitalise on emerging opportunities.
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
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