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
This week the S&P 500 recorded a modest decline of 0.3% to close at 5124. In what turned out to be an eventful week, the index declined by over 1% on Tuesday, however, the bulls decided to step in later in the week and push the index to another all-time high. The index is trading above all moving averages on both the weekly and daily time frames. The index has gained 25% since the October 2023 low and 46% since the October 2022 low.
We continue to see individual stocks perform well. Our portfolio currently comprises over 20 US stocks, including LLY, AMP, META and NVDA. We have compounded these assets resulting in excellent profit for our Phoenix community members.
The FTSE 100, the UK’s premier index, had another muted week with a decline of 0.3% to close at 7660. Price remains range bound between 7200 and 7750. Should strength return, the next major 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
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.
Price movements in WMT have historically shown distinct trends, particularly when breaking out above significant monthly pivot levels. This year is another example with price breaking out above last year’s high and forming a bullish trend.
WMT concluded the week at $60, a gain of 3.2%, including an all-time high. For the year, WMT has delivered a solid return of 14.6%. WMT’s price continues to trade above both the 50 and 200 SMAs, signifying a positive trend. Additionally, our proprietary tool, the Sublime trend filter, remains green.
Whilst on the daily chart, the Sublime trend filter continues to signal green, consistent with the longer-term trend perspective. Price action on the daily frame shows WMT trading above the 20, 50, and 200 SMAs. Following the gap up after earnings on 20th February, followed by a stock split on 26th February, price has continued higher.
Looking ahead, the next notable area of potential resistance is positioned at the $100 round number. Investors in our Phoenix community will be vigilant for the potential emergence of a continuation pattern above the all-time high. Such a development could provide an enticing opportunity for our Phoenix community members, particularly given the prevailing bullish long-term trend in this stock.
OUTPERFORMING ASSET FOR THE WATCHLIST
Caterpillar Inc. – CAT
Caterpillar Inc. (ticker: CAT) is an American Fortune 500 corporation and the world’s largest construction-equipment manufacturer. Caterpillar traces its origins to the 1925 merger of the Holt Manufacturing Company and the C. L. Best Tractor Company, creating a new entity, California-based Caterpillar Tractor Company. In 2018, Caterpillar was ranked number 65 on the Fortune 500 list and number 238 on the Global Fortune 500 list.
CAT is a stock that has a history of trends, such as in 2016-2018 and 2020-21. Throughout the second half of 2021 and 2022, the stock was in a large range. In 2023 price made two attempts to breakout, however failed. This year, following a breakout above last year’s high, price action is looking more favourable, with a gain to date of 16.5%.
On the weekly time frame, price is trading above the 50 and 200 SMA, and the Sublime trend filter is green. Whilst on the daily time frame, price is forming a linear trend.
Looking ahead, the next area of potential resistance is the $350 round number. Price could be headed for another extended trend, which could present opportunities for our Phoenix community members in a stock we have traded for excellent returns in the past.
Looking Ahead
The bulls continue to remain in control of the US equity markets. We have a large number of positions which are profiting from this momentum. As always, we will let price dictate 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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