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 5344, reflecting a slight decline of less than 0.1%. However, this modest change belies the significant volatility experienced throughout the week, with the index dropping 3% on Monday before recovering over the following days.
Early in the week, news and social media were flooded with misinformation about the events driving this volatility. Numerous so-called experts contributed to the hysteria with their opinions. The reality is that market movements are driven by price action, not opinions. This is why at Sublime Trading, we have consistently and successfully navigated through such events over the past decade.
Last week, our Phoenix Community observed the volatility with composure, adhering to our trading plan. Where necessary, we tightened stop losses on several stocks. Most of our positions recovered by the week’s end, with some even adding further profit. This outcome underscores the value of education and a proven trend-following technical analysis strategy.
While major indices like the S&P 500 provide a broad market direction, they don’t tell the full story. We continue to see individual stocks perform well, such as MCK, UNH, KO, GDDY, and MMC – all of which we have analysed in this newsletter over recent months.
Year to date, the S&P 500 has gained an impressive 12%. Despite this week’s weakness, the bullish momentum in equity markets remains strong, with the S&P 500 surging 31% since the October 2023 low and 54% since the October 2022 low.
The Nasdaq 100 outperformed with a gain of 0.4%; price bounded off the weekly 50 SMA and recovered to the pivot high at 18465 set on 18 March. The Dow Jones declined during the week by -0.4%.
The FTSE 100, the UK’s premier index, was also flat over the week, closing at 8168. 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
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 a history of sustained long-term trends, as demonstrated throughout 2021. Since then, the price has been in a broad consolidation range, including a false breakout in July 2023 and several rejections at the $50 round number.
On the weekly timeframe, following last week’s earnings, the price bounced off the 200 SMA and closed above the 50 SMA. Our proprietary tool, the Sublime trend filter, has turned green, reinforcing a bullish outlook.
On the daily timeframe, the price is now trading above the 200 SMA, though the moving averages are not yet fully aligned, with the 20 and 50 SMAs still below the 200 SMA.
This week’s momentum will be of particular interest to our Phoenix community, who have this stock on their watch list. A breakout above the all-time high could present an opportunity in a stock with a proven history of long-term trends.
OUTPERFORMING ASSET FOR THE WATCHLIST
Fiserv Inc. – FI
Fiserv Inc. (ticker: FI) is an American multinational company that provides financial technology services to clients across the financial services sector, including: banks, thrifts, credit unions, securities broker dealers, mortgage, insurance, leasing and finance companies, and retailers. In October 2015, Fiserv, Inc. was ranked third by revenue among technology providers to U.S. banks.
FI is a stock known for its history of linear trends. Between January 2020 and November 2023, the price remained in a broad range. However, it has since broken out, forming a new trend and gaining 24%, reaching a new all-time high.
On the weekly timeframe, FI continues to trade above both the 50 and 200 SMAs. Our proprietary tool, the Sublime trend filter, remains green, indicating a bullish outlook. This week, the price closed above the pivot high set on March 25.
On the daily timeframe, the Sublime trend filter also remains green, with the price trading above the 20, 50, and 200 SMAs.
Looking ahead, the next potential resistance level is the $200 round number. A breakout above the current all-time high, with confirmation, could present an opportunity for our Phoenix community in a stock with a strong history of sustained trends.
Looking Ahead
Despite this week’s volatility, the overall strength in U.S. equity markets remains intact. Our calm and measured approach allowed our Phoenix Community to maintain nearly 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
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