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
The decline in the S&P 500 in September has continued this week, resulting in a decline for the month of -4.9%. The S&P closed the week at 4288. As mentioned last week, September is historically a weak month for equities, and this year is proving to also be the case. For the bulls price is nearing support with a key pivot level at 4195, along with the daily 200 SMA (Simple Moving Average) at 4199 and weekly 50 SMA at 4156. As long-term investors, the bigger picture has more relevance and the S&P 500 remains 22% above the October 2022 lows.
Despite the pullback in the indices, we are seeing individual stocks perform well. Our portfolio currently compromises 14 US stocks and 3 currencies. We have compounded a number of these assets, in turn, delivering excellent profit for our Phoenix community members.
Examining the technicals, on the weekly time frame, the S&P 500 remains above both the 50 and 200 SMAs. The moving averages are aligned, indicating a consistent trend. Our view is that price action in September is an expected seasonal activity. We favour a fake breakdown and a reversal to the upside. We continue to remain bullish. We will let price dictate our next move.
The FTSE 100, the UK’s premier index, followed up last week’s modest decline with a further decline of -1.0%. Price is supported by the weekly 50 SMA. Should strength return, the next area of potential resistance is the pivot high from 17 April at 7936. The all-time high is 8047. We continue to monitor this index, waiting for confirmation of direction.
OUTPERFORMING ASSET FOR THE WATCHLIST
Synopsis - SNPS
Synopsys (ticker: SNPS) is an American electronic design automation (EDA) company that focuses on silicon design and verification, silicon intellectual property and software security and quality. Synopsys supplies tools and services to the semiconductor design and manufacturing industry. Products include tools for logic synthesis and physical design of integrated circuits, simulators for development, and debugging environments that assist in the design of the logic for chips and computer systems. As of 2023, the company is a component of both the Nasdaq-100 and S&P 500 indices.
SNPS is a stock in a long term trend, gaining over 1200% since 2014. SNPS has a strong history of trends which our Phoenix community has traded successfully in the past. The last bullish trend completed in December 2021. Between January 2022 and April 2023 price was in a large range of consolidation. In May price broke out in the direction of the overall trend, with a gain of 23%. This month the price printed an all-time high at $472.
On the weekly time frame, price is in an uptrend. Price is trading above both the 50 and 200 SMA, and the Sublime trend filter is green. Since price broke above the 50 SMA on 7 November, price has been bullish, gaining over 39%. Whilst on the daily time frame, price remains above all moving averages and the Sublime trend filter is also green.
A continuation pattern above the current all-time high could offer our Phoenix community members an opportunity in a good-performing stock. The next area of resistance is the $500 round number.
OUTPERFORMING ASSET FOR THE WATCHLIST
Alpha Metallurgical Resources Inc. - AMR
Alpha Metallurgical Resources (ticker: AMR) formerly Contura Energy (January 2021), is a leading resources supplier with underground and surface mining complexes across Northern and Central Appalachia. In the 2012 Forbes Global 2000, Alpha Natural Resources was ranked as the 1847th -largest public company in the world.
We last wrote about AMR in early September. Since then the price has gained over 20%. September has been a very bullish month, following August, with a gain of 28%. AMR has a history of breakouts with impulsive moves in price. AMR was in a strong trend between May 2021 and May 2022. Price then entered a long period of consolidation, until August, when price has again broken out and could be forming another powerful trend.
On the weekly time frame, AMR is trading above the 50 and 200 SMAs, indicating positive market sentiment. Our proprietary tool, the Sublime trend filter, is green, reinforcing the bullish outlook.
Similarly, on the daily time frame, the Sublime trend filter is also green, further evidence of a favourable market environment. And price is trading above the 20, 50, and 200 SMAs, which are all aligned and diverging, indicating near-term strength.
Looking ahead, the next notable level of potential resistance is the $300 round number. There is a suitable distance between the current price and this level for a trading opportunity for our Phoenix community members.
Looking Ahead
Price action in September continues to be mixed. As long term inventors, patience is a key weapon in our arsenal. We are currently applying the necessary patience, and await price to dictate our next move. Despite the recent pullback, our position is the bulls remain in control, resulting in opportunities for savvy investors, such as those in our Phoenix community.
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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