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
S&P 500
The S&P 500 remains in a long-term bull trend, but the monthly candle for March is showing bearish signs. So far, the index has dropped 5.11% this month. By the end of the month, we want to see the bearish candle shrink in size, which would indicate buyers are stepping in and pushing prices higher.
For the S&P 500 to regain momentum, the first key level to break is the psychological resistance at $6000. After that, the next targets would be the 2024 high of $6102, followed by the all-time high of $6147 set last month.
Currently, the S&P 500 is down about 3.57% for the year. However, if it finds support, there’s potential for a recovery into positive territory. On the weekly chart, the price is holding around the 50 simple moving average (SMA), which is at $5655. Over the past two weeks, we’ve seen reversal candles form, suggesting that the downward momentum from the recent correction is slowing.
On the daily chart, price is trading below the 200 SMA. After a 10% drop between February 19 and March 13, price has started to bounce back slightly. If the price breaks below the March 15 low of $5507, it would signal further market weakness and the possibility of a bearish trend. For now, we need more confirmation before assuming a bear trend is developing. If the March 15 low holds, we want to see price break above the 200 SMA and then form a pattern of higher highs and higher lows.
The S&P 500 has been consolidating since December 6, 2024, moving sideways for 70 trading days. To signal a stronger recovery, price needs to gain momentum, break out of this range, and move above the February 19 all-time high while establishing a clear trend of higher highs and higher lows.
Dow Jones
The Dow Jones has been bearish this March, currently down 4%. However, it’s slowly recovering after closing over 5% lower last week. The 2024 all-time high is $45,073, and the index is down 1.23% so far this year.
Nasdaq 100
The Nasdaq is down 5.21% for March and remains below the important $20,000 resistance level. To regain momentum, it needs to break above $20,000 and continue climbing past the 2024 high of $22,146, which is acting as resistance.
FTSE 100:
The FTSE 100 currently has a bearish candle for March. Earlier this month, prices dropped to the 2024 high around 8473 but have since bounced from this support level and moved upward. However, as of now, March’s candle is down by 1.81%.
By the end of the month, we want to see prices rise above the monthly open at 8809. If the FTSE closes March with a bullish candle by moving above this level, it would indicate bullish momentum, suggesting the index could continue climbing higher. For the year, the FTSE is up 5.8%, showing strong performance so far. However, a clear and strong upward move is needed, with a pattern of higher highs and higher lows for sustained growth.
Last week’s weekly candle closed as a reversal candle, but currently, prices are consolidating. Until we see clear breakouts, the index is likely to remain sideways. On the daily chart, Friday’s candle bounced off the 50-day simple moving average (around 8628), indicating that this level is holding as support. If prices continue to hold here, we want to see a further bounce and continuation to the upside.
The key level to watch is the March 3rd high at 8906. A break and close above this level would confirm a continuation of the bullish trend. If prices fail to break above that point, it would confirm the index is stuck in a consolidation phase, which, based on past trends, could last for several weeks, months, or even longer. Let’s monitor the FTSE in the coming weeks to better understand its likely direction.
PERFORMANCE REVIEW
Palantir Technologies (PLTR)
The long-term trend for this stock remains bullish. In March, we’re seeing a reversal candle forming, just like the ones observed in February and January. This indicates significant volatility, with strong price movements both upward and downward throughout the month.
For example, in February, the stock price rose to $125 before dropping to $84 by the end of the month, falling below the $100 psychological level. This month, the price dipped below the 2024 high of $84, reaching a low of $74, before recovering and moving back above the $84 level. Currently, the March candle is bullish, and we’re looking for its body to grow larger as the month progresses, ideally moving toward the $100 mark again. As of now, the March candle shows a 7.24% gain, and for the year, Palantir is up 20%, showing strong performance despite market volatility.
Looking at recent volatility, the stock hit an all-time high of $125 on February 19 but dropped to $74 by March 10—a 40% decline. Since then, it has started to recover, gaining 21% so far, with a strong move up on Friday.
If the momentum continues, the first key level to watch is $100, which is an important psychological support and resistance point. Beyond that, breaking and closing above the all-time high of $125 from February 19 would confirm a continuation of the bullish trend.
OUTPERFORMING ASSET FOR THE WATCHLIST
Berkshire Hathaway (BRK.B)
The March candle for Berkshire Hathaway stock currently appears to be a reversal candle. It shows a long lower wick, as the stock initially dropped below 2024’s high of $491 earlier this month. However, it has since recovered, moving back above $491 and even above the $500 round number, an area of support.
On the weekly chart, the price is trading above the 50- and 200-day simple moving averages. Historically, Berkshire Hathaway trends upward consistently but often experiences extended periods of consolidation lasting several months. When the stock does break out, it usually makes a strong upward move before entering another consolidation phase. Currently, the stock has just broken out of a consolidation phase, where the resistance was at $491. This breakout occurred in late February, pushing the price higher. However, momentum now seems to have slowed, with the stock holding above the $500 level. We could see another consolidation period lasting weeks or months before a continuation of the upward trend. Alternatively, the stock could begin an impulsive trend, potentially lasting for weeks, months, or even over a year, given its strong historical performance.
On the daily chart, the price is above the 20-, 50-, and 200-day simple moving averages. The stock had been in a long-term consolidation phase since September 4, 2024. On February 24, it broke out of this consolidation zone, with the previous resistance at $491 turning into support. This also aligned with the 20-day simple moving average. After this breakout, the stock bounced from the $491 area and moved above the $500 round number, reaching a record high of $530 on March 20. Since then, some weakness has emerged, and the price could potentially drop to the 20-day simple moving average at $506. If the stock holds at this level, bounces, and breaks above its previous high, it would confirm a continuation of the bullish trend.
The current move appears impulsive, suggesting the potential for a linear trend to develop. For March, the stock is up 1.51%, recovering strongly after being down nearly 5% earlier in the month. Year-to-date, Berkshire Hathaway is up 14.99%, showing solid performance. Looking ahead, we’ll need to see if this momentum can continue.
Looking Ahead
The U.S. equity markets are showing volatility, but it’s important for prices to hold current support levels and build momentum to reach new highs. After Friday’s strong finish, there’s hope for a rebound and a continuation of the bullish rally.
Our data-driven strategy is delivering consistent results. Even during short-term dips, our portfolio stays well-positioned by focusing on stocks with strong upward trends, proving the reliability of our trend-following approach.
By keeping a diversified portfolio of trending stocks, we let price movements guide our decisions. This keeps us adaptable, ready to respond to market changes, and prepared to take advantage of new opportunities.
At Sublime, we are dedicated to detailed, objective analysis driven by chart-based data and evidence. This focus allows us to support our Phoenix community in identifying potential for sustained, profitable trades.
Keep it simple. Keep it Sublime.
The ST Team
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