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 U.S. indices began September with weakness, in line with historical trends, as September is typically the weakest month of the trading year. This result is not surprising. As always, we will closely monitor the key indices for potential support levels, while keeping an eye on the stocks in our portfolio. Should the weakness persist, we will exit positions in stocks that break below our identified support levels and shift focus to those with breakout potential.
The S&P 500 ended the week at 5,408, down 1.7%. Price has failed to hold above the pivot high of 5,669 set on 16th July, though the index remains 5.5% above the August lows. Year to date, the S&P 500 has posted an impressive 14% gain. Despite recent weakness, bullish momentum remains strong, with the index up 32% since the October 2023 low and 55% since the October 2022 low.
While major indices like the S&P 500 provide a broad market overview, they don’t tell the full story. We continue to see strong outperformance from individual stocks such as PGR, UNH, KO, and MMC, all of which we’ve covered in recent months.
The Nasdaq 100 declined by 5.9%, and the Dow Jones fell by 3.2%.
The FTSE 100, the UK’s leading index, dropped 2.3%, closing at 8,181. After breaking above its all-time high in April, the index consolidated between 8,100 and 8,300 from June to August. Last week showed signs of strength, hinting at a possible breakout, but price has since returned to the range.
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 has a strong track record of trends, dating back to as early as 2013. This history gives us confidence that the stock has the potential to continue trending in the future. Notably, in June 2023, the price broke above the previous year’s high of $183. Since then, it has gained over 44%, reaching an all-time high of $232 this month.
On the weekly timeframe, MMC continues to trade above both the 50 and 200 SMAs. The Sublime trend filter remains consistently green, reinforcing the bullish outlook.
On the daily timeframe, our proprietary Sublime trend filter also maintains a green signal, in line with the longer-term trend. The daily price action shows MMC trading above the 20, 50, and 200 SMAs, with the zone between the 20 and 50 SMAs consistently acting as support. The alignment of these moving averages further strengthens our confidence in the trend.
Looking ahead, a close above the recent all-time high could offer an opportunity for our Phoenix community members in a stock with a well-established history of linear, long-term trends.
OUTPERFORMING ASSET FOR THE WATCHLIST
Cigna Corporation – CI
Cigna (ticker: CI) is an American multinational managed healthcare and insurance company based in Bloomfield, Connecticut. Its insurance subsidiaries are major providers of medical, dental, disability, life and accident insurance and related products and services. The company ranked No. 12 in the 2021 Fortune 500 list of the largest United States corporations by total revenue.
CI is a stock with a strong history of trends, notably during the periods of 2013-2015 and 2017. In 2022, CI significantly outperformed the U.S. indices, delivering a 68% gain. While upward momentum has continued since 2022, the trend has not followed a linear path. Importantly, this month the stock reached an all-time high of $371.
On the weekly timeframe, price remains above both the 50 and 200 SMAs, and our proprietary tool, the Sublime trend filter, is signalling green. Similarly, on the daily timeframe, the Sublime trend filter is also green, with the moving averages aligned across all timeframes, further reinforcing confidence in the trend’s strength.
Looking ahead, a continuation pattern above the all-time high could present opportunities for our Phoenix community members, as CI is a stock that has delivered strong returns in the past.
Looking Ahead
This week, U.S. indices experienced a sharp decline; however, we maintain the view that the underlying strength remains with the bulls. As demonstrated in August, we will continue to apply a calm and disciplined approach, closely monitoring the situation. We hold positions in a significant number of trending stocks and, as always, will let price action guide our next steps.
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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