Welcome to our weekly newsletter where we provide an overview of the main US and UK indices, along with analyses of selected stocks that are outperforming the market.
Let’s get into this week’s newsletter!
US & UK INDICES OVERVIEW
This week the S&P 500 was subdued, declining by -0.2% to close the week at 4450. The S&P 500 was in positive territory until Friday when it declined by -1.2%. As we mentioned last week, September is historically a weak month for equities. As long term investors we embrace such volatility, and modest declines. Looking at the bigger picture, the S&P 500 remains 27% above the October 2022 lows, and the bull trend remains in place. This week there are 59 breakouts, a slight increase on last week’s 54. On a sector basis, ten of eleven sectors remain in a breakout position, demonstrating the broad strength of the market.
This week we have added 1 US stock to our watchlist. Our portfolio currently compromises 14 US stocks and 2 currencies. We have compounded a number of these assets, in turn, delivering excellent profit for our Phoenix community members.
On the weekly time frame, the S&P 500 remains above both the 50 and 200 SMAs (Simple Moving Average). The moving averages are aligned, indicating a consistent trend. Our proprietary tool, the Sublime trend filter, is presenting a green signal. Whilst on the daily time frame, price is respecting the August support level. Our view is that price action in September is simply a continued pullback in a broader pattern of higher highs and higher lows which commenced in October. We will let price dictate our next move.
The FTSE 100, the UK’s premier index, followed up last week’s modest gain with a strong gain of 3.1%. Price has broken out above the weekly 50 SMA. Should strength continue to the update then the next area of potential resistance is the pivot high from 17 April at 7936. The all-time high is 8047. We continue to monitor this index, waiting for confirmation of direction.
OUTPERFORMING ASSET FOR THE WATCHLIST
Linde Plc - LIN
Linde plc (ticker: LIN) is the world’s largest industrial gas company by market share and revenue. It serves customers in the healthcare, petroleum refining, manufacturing, food, beverage carbonation, fibre-optics, steel making, aerospace, material handling equipment (MHE), chemicals, electronics and water treatment industries. The company’s primary business is the manufacturing and distribution of atmospheric gases, including oxygen, nitrogen, argon, rare gases, and process gases, including carbon dioxide, helium, hydrogen, ammonia, electronic gases, specialty gases, and acetylene. The company is ranked 463rd on the Fortune Global 500[7] and 187th on the Forbes Global 2000.
LIN has been in a long-term trend since price broke out in October 2017, subsequently gaining over 165%. During this period LIN has exhibited a number of periods of impulsive trends such as between April 2020 – December 2021. Following a period of consolidation, in April price broke out again, this time above last year’s high, and is potentially forming another trend.
LIN closed the week at $388. Price is trading above the 50 and 200 SMAs. The Sublime trend filter, our proprietary tool, is green, indicating a sustained trend.
On the daily chart, since April price is using the 50 SMA as support. Price is trading above the 200 SMA and the moving averages are aligned, confirming the stock’s positive momentum.
Looking forward, the $400 round number serves as an area of potential resistance to watch. Our Phoenix community members will be keeping a close watch on the potential formation of any continuation patterns above the all-time high, as this could provide trading opportunities, given LIN’s historical trend behaviour.
OUTPERFORMING ASSET FOR THE WATCHLIST
Marsh & McLennan Companies - MMC
Marsh & McLennan Companies, Inc. (ticker: MMC) is a global professional services firm, with businesses in insurance brokerage, risk management, reinsurance services, talent management, investment advisory, and management consulting. Its four main operating companies are Marsh, Guy Carpenter, Mercer, and Oliver Wyman. MMC ranked #212 on the 2018 Fortune 500 ranking. In 2017, Business Insurance ranked MMC #1 of the world’s largest insurance brokers.
MMC is a stock with an excellent history of trends dating back as far as 2013. This pedigree gives us confidence that the stock has the potential to continue to trend in the future. Notably, in June, price broke out above last year’s high at $184. Since then price has been bullish, resulting in an all-time high.
MMC concluded the week at $196. On the weekly time frame MMC continues to trade above both the 50 and 200 SMA. The Sublime trend filter remains consistently green, aligning with the bullish sentiment.
On the daily timeframe, the Sublime trend filter also continues to signal green, consistent with the longer-term trend perspective. Price action on the daily frame shows MMC trading above the 20, 50, and 200 SMAs. Whilst the moving averages are also aligned, further reinforcing the strength of the current trend.
Looking ahead, the next notable area of potential resistance is immediately ahead, being the $200 round number. Investors in our Phoenix community will be vigilant for the potential emergence of a continuation pattern above the all-time high and the round number. A breakout beyond these levels could provide an enticing opportunity for our Phoenix community members, particularly given the prevailing bullish long-term trend in this stock.
Looking Ahead
Price action in September continues to be mixed. As long term inventors, patience is a key weapon in our arsenal. We are applying the necessary patience in September, and await price to dictate our next move. Despite the recent pullback our position is the bulls are in control, resulting in opportunities for savvy investors, such as those in our Phoenix community.
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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