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
As discussed last week, the US indices continue to show strength despite widespread commentary of a recession in the US, and other impacts of high inflation and high-interest rates. Whilst we remain vigilant, we continue to share ideas with our Phoenix community for excellent returns.
The trend in the S&P 500 in 2023 continues, with a gain to date of 7.8%. In March the index increased by 3.7%, whilst in the current month, as of April 16th, the S&P 500 has increased by 0.9%.
The S&P 500 has been showing bullish tendencies in the weekly time frame, with the index gaining 0.8% in the current week. In terms of the moving averages, the S&P 500 is trading well above both its weekly 50 and 200 SMA, indicating a strong bullish trend. The moving averages are aligned. The weekly Sublime trend filter is green, indicating a bullish trend.
On the daily time frame, the S&P 500 is also showing a bullish trend. As of April 16, the index is trading well above its daily 20, 50 and 200 SMA. All three SMAs are aligned positively, and the daily Sublime trend filter is green, indicating a bullish trend.
As highlighted in our previous newsletter, the ongoing recovery of the US economy continues to boost investor confidence. While it is not our practice to trade news events, we advise our members to stay informed about upcoming events that could potentially impact the market, such as the Q1 earnings reports from major corporations and the Federal Reserve’s monetary policy meetings and statements. Our team is closely monitoring the major indices and will provide timely updates to our Phoenix community as needed.
OUTPERFORMING ASSET FOR THE WATCHLIST
McDonald's Corporation - MCD
McDonald’s Corporation (MCD) is a multinational fast-food chain that operates in over 100 countries worldwide. Founded in 1940, the company is headquartered in Chicago, Illinois. McDonald’s is one of the largest fast-food chains globally, serving millions of customers each day.
Looking at the monthly chart, MCD is in an uptrend that commenced in October 2015. MCD started the year at $264 and in a period of consolidation. Price is currently trading at $289, an all-time high and an increase of 9.9% in the year. Price has been particularly bullish in March and April with gains of 6.0% and 3.4% respectively.
On the weekly chart, MCD is in a bullish trend, and the Sublime trend filter is green. The weekly 50 and 200 SMA are both aligned in an upward direction, and the price is currently trading above both these averages, indicating bullish momentum.
Looking at the daily chart, the price of MCD is currently trading above the 20, 50 and 200 SMA, and the moving averages are fully aligned. The Sublime trend filter is green.
MCD announces its first-quarter 2023 earnings on April 25th. In terms of investor sentiment, MCD has relatively high institutional ownership, with about 69% of the shares being held by institutional investors. This suggests that there is a high level of confidence in the company’s future growth prospects among professional investors. Overall, the sentiment towards MCD stock appears to be positive, and the stock may continue to trend higher in the coming months.
In the past, our Phoenix Community has traded MCD for an excellent profit. A continuation pattern above the all-time high could offer our investors an opportunity in a very bullish stock. The next area of resistance is the $300 round number.
OUTPERFORMING ASSET FOR THE WATCHLIST
Merck & Company - MRK
Merck & Company (MRK) is an American multinational pharmaceutical company that develops, manufactures, and markets a wide range of pharmaceutical products, including vaccines, drugs, and animal health products. The company was founded in 1891 and is headquartered in Kenilworth, New Jersey. Merck is one of the largest pharmaceutical companies in the world, with a market capitalization of over $200 billion.
Looking at the monthly chart, MRK has been very bullish since October last year when it broke out from a long period of consolidation. During that period it gained 32.9%. April is proving to be a particularly bullish month with a gain of 8.4% to date.
On the weekly chart, MRK is recovering from weakness in January and is at a critical pivot level which represents an all-time high. The Sublime trend filter is green and the weekly 50 and 200 SMA are both aligned in an upward direction, indicating bullish momentum.
Looking at the daily chart, the price of MRK is currently trading above the 20, 50 and 200 SMA. This week the 20 SMA crossed above the 50 SMA; all moving averages are now aligned, indicating bullish momentum. The Sublime trend filter is also green, further confirming the bullish trend.
MRK is expected to release its first-quarter 2023 earnings on April 27th, which is an essential event for investors to watch. The sentiment towards MRK stock is positive, with institutional investors holding about 75% of the shares. This suggests that professional investors have confidence in the company’s future growth prospects. Overall, the outlook for MRK stock appears to be bullish, and the stock may continue to trend higher in the coming months. A breakout above the current all-time high could offer our Phoenix community an opportunity in a very strong bullish stock. The next area of resistance is the $150 round number.
Looking Ahead
This week the US indices have again continued the near-term strength following the weakness due to the US banking situation. With the leading US indices rebounding strongly, resulting in the moving averages aligning across all indices on the main time frames, we are looking for new opportunities. Whilst we remain vigilant, we continue to share ideas with our Phoenix community for opportunities for excellent returns.
Keep it simple. Keep it Sublime.
The ST Team
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