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 closed the week at 5554, marking a gain of 3.9%. The index has risen 8.4% since the lows observed last Monday. The hysteria and misinformation of market capitulation circulated by various so-called experts and analysts have once again failed to materialise, with the trends we have been monitoring since October 2022 remaining intact.
As highlighted last week, the advantage of utilising a proven educational programme was evident as our Phoenix Community navigated the volatility with composure, adhering to our established trading plan.
Year to date, the S&P 500 has delivered an impressive 16% gain. The bullish momentum in equity markets remains robust, with the S&P 500 surging 33% since the October 2023 low and 56% since the October 2022 low.
While major indices like the S&P 500 usefully provide broad market direction, they do not capture the entire picture. We continue to see strong outperformance from individual stocks, such as MCK, UNH, KO, GDDY, and MMC—all of which we have analysed in recent months.
The Nasdaq 100 outperformed with a gain of 5.4%, continuing its momentum from the previous week. The Dow Jones increased by 3.1% and achieved a new all-time high close of 40484.
The FTSE 100, the UK’s premier index, rose by 1.8%, closing at 8311. After breaking above its all-time high in April, the price has since returned to a range between 8100 and 8300.
OUTPERFORMING ASSET FOR THE WATCHLIST
Walmart Inc. – WMT
Walmart Inc. (ticker: WMT) is an American multinational retail corporation that operates a chain of hypermarkets (also called supercenters), discount department stores, and grocery stores in the United States. Walmart is the world’s largest company by revenue, with about US$570 billion in annual revenue, according to the Fortune Global 500 list in October 2022.
WMT’s price movements have historically exhibited distinct trends, particularly when breaking above significant monthly pivot levels. This year is another example, with the price breaking out above last year’s high in February and forming a bullish trend.
WMT closed the week at $73, gaining 8.1% and reaching an all-time high. Year to date, WMT has delivered an impressive return of 40%. The stock continues to trade above both the 50 and 200 SMAs, indicating a strong positive trend. Our proprietary tool, the Sublime trend filter, remains green.
On the daily chart, the Sublime trend filter also reflects the ongoing bullish trend. Following Thursday’s earnings release, the price responded positively, aligning with the long-term trend. WMT is now trading above the 20, 50, and 200 SMAs.
Looking ahead, the next potential resistance level is at the $100 round number. Investors in our Phoenix community will be closely monitoring for the emergence of a continuation pattern above the all-time high. Such a development could present a significant opportunity, given the prevailing bullish long-term trend in this stock.
OUTPERFORMING ASSET FOR THE WATCHLIST
Boston Scientific Corporation – BSX
Boston Scientific Corporation (ticker: BSX) is a biomedical/biotechnology engineering firm and multinational manufacturer of medical devices. The company is best known for the development of a drug-eluting stent which is used to open clogged arteries. The company is listed in the S&P 500. In 2023 it generated over $14 billion in revenue, and employs over 48,000 staff worldwide.
BSX has a strong history of trending, particularly from 2013 to 2019, which gives us confidence in the stock’s potential to continue trending in the future. From 2020 to 2023, the stock was in a broad consolidation range. However, in March 2023, the price broke out of this range and has since been bullish, with a gain of over 65% to date. The price has been especially impulsive in 2024.
BSX ended the week at $77. On the weekly timeframe, BSX continues to trade above both the 50 and 200 SMAs, with our proprietary Sublime trend filter signalling green, aligning with the bullish sentiment.
On the daily timeframe, the Sublime trend filter also remains green, consistent with the longer-term trend. After some weakness last week, the price has recovered to close above the 20 and 50 SMAs.
Looking ahead, the next potential resistance level is the $100 round number. This is a high-quality stock, and we will continue to share opportunities with our Phoenix community members if the price can break out above the all-time high.
Looking Ahead
The US indices have recovered from last week’s volatility; the overall strength in U.S. equity markets remains intact. Our calm and measured approach allowed our Phoenix Community to maintain nearly all positions in U.S. stocks, which are benefiting significantly from this momentum. As always, we will let price action guide our next move.
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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