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 moved significantly to the downside, in turn breaking the recent bullishness. On the monthly time frame, the S&P 500 is very bearish. A rejection of 4285 in August is the same level as price rejected in May. On the weekly time frame, the S&P 500 failed at the 50 SMA; likewise, price also failed at the daily 200 SMA. The bearish end to the week was also seen in the Nasdaq 100 and Dow Jones indices. With the earnings season complete, we will await next week to ascertain if price can regain its recent upward movement or continue the bearish momentum from Friday. Our position remains unchanged; we continue to seek opportunities but remain vigilant.
This week the FTSE 100, the UK index, has had a muted month with a modest decline of 0.1%. On the weekly time frame price remains in a range between the all-time high at 7687 and the weekly SMA, currently at 6942. On the daily time frame, the weakness in price this week has resulted in price moving below the 20 SMA; price remains above the 200 SMA. As with the US indices, we are actively looking for opportunities but stay vigilant.
OUTPERFORMING STOCK FOR THE WATCHLIST
The Hershey Company - HSY
The Hershey Company is a stock with a strong history of trends such as 2011-13, 2019, and 2021-22. Since December last year, price has gained 28% whilst the S&P has declined 16% over the same period. Price created an all-time high in August at $235.
On the weekly time frame, price continues to trade above the 50 and 200 SMA, and the Sublime trend filter remains green.
On the daily time frame below, price is trading above the 50 and 200 SMA, but below the 20 SMA following Friday’s bearish move. The Sublime trend filter is also green. Price is trading above last year’s high at $194, along with the £200 round number.
Looking ahead, a continuation pattern above the current all-time high could offer our Phoenix community members an opportunity in a very resilient stock in a generally bearish market. The next area of resistance is the $300 round number.
USDJPY is an asset with a history of trends. As we mentioned previously, investing in forex assets can be difficult, but with the proper knowledge and support, such as that which our Phoenix community receive, successfully trading the asset class is achievable.
We first entered USDJPY earlier this year. Price has been particularly bullish since price broke above last year’s high at 115.52, with a gain to date of 20%. August’s monthly candle has displayed bullishness, countering the weakness displayed in July. The return to date on the total portfolio is currently 4%; we have compounded this position and we anticipate this asset trending for many months, as we continue to see strength in the US Dollar Basket (‘DXY’).
The total amount of time required to set up and manage this trade has been less than two hours – 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.
This week the US and UK indices have broken their recent bullishness. However, price never moves in a straight line. We now need to assess whether Friday’s move will be sustained, resulting in further weakness. 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