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 the markets have continued the recent bullishness, marking the fourth week of gains in the S&P 500 – the first time since November 2021. On the monthly time frame, performance in August has been bullish with a gain to date of 3.6%, following July’s gain of 9.3%. The S&P 500 has a couple of potential immediate hurdles, being the weekly 50 SMA and the daily 200 SMA at 4352 and 4322 respectively – price is currently trading at 4279. Similar patterns are evident in the Nasdaq 100 and Dow Jones, giving us confidence in the strength. On the daily time frame, patterns of higher highs and higher lows are evident in all indices. With the earnings season continuing, we need to remain aware of volatility. Our position is we continue to seek opportunities but remain vigilant.
This week the FTSE 100, the UK index, had a gain of 0.8%. On the daily time frame, price is trading above all moving averages; 20, 50 and 200 SMA. This week the 20 SMA crossed above the 200 SMA, however, the moving averages are not fully aligned – we prefer to see full alignment to have complete confidence in price action. Again, we are actively looking for opportunities but remain vigilant.
OUTPERFORMING ASSET FOR THE WATCHLIST
RSG - Republic Services Inc.
Republic Services is an American waste disposal company created in 1981. Its services include non-hazardous solid waste collection, waste transfer, waste disposal, recycling, and energy services. It is the second largest provider of waste disposal in the United States (as measured by revenue) after Waste Management Corporation. Based on an annual report published in 2018, with revenue of $10 billion, the firm retained the number two position in the industry.
RSG is a stock our Phoenix community traded for excellent profit during 2021. The stock has a linear, long-term trend, particularly evident throughout 2015 – 2020. RSG peaked in October 2021 at $146 and since then has been in a large range with support at $120. June displayed an indecision candle, whilst July and August have been bullish with monthly gains of 6.0% and 4.4% respectively. Price is approaching an all-time high which could act as potential resistance.
On the weekly time frame, price is trading above the 50 and 200 SMA, and the Sublime trend filter is green. Following a break and close above the 50 SMA price has been bullish, gaining 10.6% over the past three weeks.
On the daily time frame, the Sublime trend filter is also green. Price is currently trading above all moving averages. Importantly, all moving averages are now aligned and are diverging – a sign of bullishness.
RSG had earnings last week. 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.
Microsoft - MSFT
Microsoft is a stock with unparalleled performance, with a trend dating back to July 2016! In 2022 price displayed weakness, falling as much as 31% from its all-time high; however, the price remains an incredible 120% above the pandemic low.
We first entered MSFT in August 2020 and have since compounded on multiple occasions. The total return to date exceeds 6% using a total risk of 2%. This stock is a good example of the value of selecting high-performing stocks that have a history of long-term trends. The total amount of time taken to set up and manage this trade has been less than two hours over nearly two years – this is the benefit of trend trading; using a higher time frame such as monthly and weekly charts avoids the noise and stress of shorter time frames.
This week the US and UK indices have continued the recent bullishness. We now need to assess whether recent performance will hold and whether strength will continue. If so, our patience 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