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 finished the week at 5815, posting a 1.1% increase and reaching a new record close. The index has now risen 14% since its August lows, with October maintaining the bullish trend seen in previous months.
So far this year, the S&P 500 has gained an impressive 22%. Despite periods of volatility, the bullish trend remains intact, with the index up 40% from its October 2023 low and 63% from its October 2022 low.
While indices like the S&P 500 provide a broad overview of market trends, they don’t fully reflect individual stock performance. We continue to observe significant outperformance in specific stocks such as PGR, UNH, KO, and MMC, which have been highlighted in recent updates.
The Nasdaq 100 built on last week’s momentum, gaining 1.2%, while the Dow Jones also rose by 1.2%, achieving a new all-time high close.
In the UK, the FTSE 100 fell by 0.3%, ending the week at 8254. After reaching a record high in April, the index has been consolidating between 8100 and 8300 since June, and despite signs of strength, it has once again returned to this range.
PERFORMANCE REVIEW
Meta Platforms – META
META (ticker: META) owns and operates Facebook, Instagram, Threads, and WhatsApp, among other products and services. It is considered one of the Big Five American information technology companies, alongside Google’s parent company Alphabet, Amazon, Apple, and Microsoft.
Our breakout strategy initiated a position in META in January 2024, following a close above the previous year’s high. As the price moved in our favour, additional compound positions were added. January and February saw particularly bullish momentum, and while a pullback occurred in April, the stock has since resumed its upward trajectory, delivering a total gain of 55% and reaching an all-time high of $603.
To date, this trade has delivered an impressive 2916% Return on Investment and a 52% Return on Capital, with a full portfolio risk of 2%.
META serves as a prime example of a trending stock. The total time spent setting up and managing this trade has amounted to just a few hours over ten months – illustrating one of the key advantages of trend trading. By focusing on higher time frames such as monthly and weekly charts, traders can avoid the noise and stress of shorter time frames. This approach offers busy professionals the flexibility to focus on other priorities without being tied to the trading screen for hours each day.
OUTPERFORMING ASSET FOR THE WATCHLIST
Nvidia Corporation – NVDA
Nvidia Corporation (ticker: NVDA) is an American multinational technology company. It is a software company which designs graphics processing units (GPUs), application programming interface (APIs) for data science and high-performance computing as well as system on a chip units (SoCs) for the mobile computing and automotive market. Nvidia is also a dominant supplier of artificial intelligence hardware and software. In a world increasingly reliant on technology, the chances are that the technology you are using is being powered by an NVDA GPU!
NVIDIA (NVDA) has demonstrated a strong history of long-term trends, particularly since October 2022, with an impressive gain of 947%. The stock closed the week at $135, with bullish momentum continuing to drive price action. October has been notably strong, delivering a 13.7% gain so far. NVDA is now just over 2% away from its all-time high, set in June.
On the weekly time frame, NVDA remains well above the 50 and 200 SMAs, reinforcing the positive outlook. Our proprietary tool, the Sublime trend filter, continues to display green, signalling sustained bullish sentiment. On the daily time frame, the Sublime trend filter is also green, with the price trading above the 20, 50, and 200 SMAs.
Looking forward, NVDA has been trading in a broad range between $90 and $140 since June. The next key area of potential resistance is the $150 round number. If NVDA forms a continuation pattern above its all-time high, it could present another promising opportunity for our Phoenix community members, who have benefited significantly from this stock in the past.
Looking Ahead
This week, U.S. markets continued to build on the recovery from August’s weakness, with many stocks now reaching new all-time highs, a trend we have frequently highlighted in this newsletter. As we’ve previously discussed, our disciplined and measured approach has proven highly effective, with our positions benefiting from the ongoing positive market momentum. Gains in trending stocks have further bolstered the profitability of our open positions, underscoring the strength of our strategy.
We currently hold positions in a substantial number of stocks exhibiting strong upward trends. As always, we remain committed to letting price action guide our decisions, ensuring we stay aligned with market conditions and well-positioned to capitalise on new opportunities.
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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