Welcome to another edition of our weekly newsletter where we provide an overview of the main US and UK indices, a selection of outperforming assets with deep analysis, and finally, an analysis of an asset we have in our portfolio, including a discussion on the returns the asset is generating for our Phoenix members.
Let’s get into this week’s newsletter!
US & UK INDICES OVERVIEW
This week has witnessed renewed strength in the US indices. The July candle has closed with a gain in the S&P 500 of over 9%. Price has also regained the 4000 level. Similar strength has been seen in both the Nasdaq 100 and Dow Jones, with monthly gains of 12.8% and 6.8% respectively. On the daily timeframe we now have a pattern of higher highs and higher lows; an indicator of momentum. With the earnings season currently underway, we also need to be aware of volatility. Our position is we continue to actively seek opportunities but remain vigilant.
This week the FTSE 100, the UK index, gained over 2% to close the month with a gain of 3.5%. Price also closed above the weekly 50 SMA. On the daily time frame, price is trading above all moving averages; 20, 50 and 200 SMA – however, we need to see alignment before complete confidence in price action. Again, we are actively looking for opportunities but remain vigilant.
OUTPERFORMING ASSET FOR THE WATCHLIST
PWR - Quanta Services
Quanta Services is an American corporation that provides infrastructure services for electric power, pipeline, industrial and communications industries. Capabilities include the planning, design, installation, program management, maintenance and repair of most types of network infrastructure. Quanta Services employs about 40,000 people. Its operating companies achieved combined revenues of about $11 billion in 2018. It is headquartered in Houston, Texas. In 1998, Quanta went public on the New York Stock Exchange and was added to the S&P 500 index in June 2009.
PWR is a stock our Phoenix community traded very successfully throughout 2020 and 2021 when the stock increased over 200%. Since October 2021 price action has been mixed; however in July price has been bullish with a gain of 10.7%, resulting in an all-time high.
On the weekly time frame, price is trading above the 50 and 200 SMA, and the Sublime trend filter is green.
On the daily time frame, the Sublime trend filter is also green. Price is currently trading above all moving averages. This week price gapped to create an all-time high at $147 but was rejected back to the previous all-time high at $139.
Looking ahead, we will monitor the current price action. A continuation pattern above the all-time high and the formation of a linear trend could present opportunities for our Phoenix community members in a stock that has delivered a good profit in the past.
PERFORMANCE REVIEW
MCK - McKesson Corporation
We last wrote about MCK in our newsletter on 3rd July. MCK is a stock with a history of trends. The July candle is now closed and has displayed strength with a gain of 4.7%. Price has created an all-time high of $342, and we will seek further compounding opportunities should we see a continuation pattern at this level. The next area of resistance is the $400 round number.
We first entered MCK in early January and have since compounded three times to have four positions in total. The total return to date is 9% using a total risk of 1%. This stock is a good example of trending stocks in a volatile market. The total amount of time required to set up and manage this trade has been less than two hours over seven months – this is the benefit of trend trading; using higher time frames such as monthly and weekly charts avoids the noise and stress of shorter time frames. This approach enables busy professionals the freedom to pursue other interests and avoid hours each day in front of a trading screen.
Looking Ahead
This week the US and UK indices have demonstrated strength. We now need to assess whether recent performance will hold and whether strength continue. If so, the patience we have displayed over recent months will be rewarded. We continue to actively monitor all markets, scanning for opportunities such as the stocks described today, along with the JPY forex pairs and Dollar strength, and sharing these with our Phoenix community for excellent returns.
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Keep it simple. Keep it Sublime.
The ST Team
