Welcome to our weekly newsletter, where we offer insights into stock setups that we share with our Phoenix members.
In last week’s newsletter, we discussed the main indices being broadly flat across the week, but within the week there had been an almighty battle going on between the bulls and bears, resulting in wild intraday swings in price. This week the markets have rebounded, with the bulls regaining control. This has resulted in the main indices to the 200 simple moving average (SMA).
Our position remains that the bull market, which commenced in 2008, remains intact, but we are currently standing aside until a clear direction is formed in the main indices.
At Sublime Trading, we have a clear trading plan that governs our approach. This is the value of our education programme, where we teach members the right techniques to manage in all market conditions.
Let’s get into this week’s newsletter!
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Here are how the best-performing UK & US stocks, as picked out by our scanning process, have
performed this week.
For a glossary of terms click here.
OUTPERFORMING STOCKS COVERED THIS WEEK
UK Stocks
US Stocks
FTSE 100
On the monthly time frame, the strength displayed in December has continued into January. December closed with a 4.6% gain and January’s bullishness has already resulted in a 0.8% gain to date. Price has now broken out of last year’s range and the next major area of resistance is the monthly pivot level at 7727.
On the weekly time frame, the Sublime trend filter is green. Price is trading above the 50 and 200 SMA. This week price initially displayed strength but has weakened as the week progressed.
On the daily time frame below, price has retreated to the 50 SMA where it found support. Price has subsequently bounced and is currently trading above the 20, 50 and 200 SMA. The Sublime trend filter is green. Our overall bias remains bullish, and we continue to look for stocks outperforming the Index.
UK STOCKS
3I Infrastructure – 3IN
A stock that originally floated March 2007, price lacked any clear direction until October 2014; price then formed a strong trend until the pandemic in March 2020. On the monthly time frame, price has been bullish in recent months, rising strongly since October last year, however, January has shown weakness with a 2.4% decline. Price has shown modest strength in the first week of February.
On the weekly time frame, price is trading above the 50 and 200 SMA, and the Sublime trend filter is green. In the first week of January price displayed a strong reversal candle, and since then price has weakened.
On the daily time frame below, this week Sublime trend filter switched from red to grey. Price is currently trading below the 20 and 50 SMA, but it remains above the 200 SMA. Price has been volatile over the past two weeks. A continuation pattern above the all-time high could offer Phoenix members an opportunity in a stock that has a history of strong trends. The next level of resistance is the £4 round number.
Diageo - DGE
This stock has a history of trends, however, there have been long periods of price reversals. On the monthly time frame, price suffered a result of the pandemic and has subsequently moved higher. In January price created an all-time high at £41 before weakening by 7.8% in the month.
On the weekly time frame, price is trading above the 50 and 200 SMA, and the Sublime trend filter is green.
On the daily time frame below, as mentioned, weakness in price resulted in it retreating to a major pivot level at £36. The Sublime trend filter remains red. This is a stock to watch, but not one that is high on our watchlist, given its history of performance. We will share any signals with our Phoenix members.
Safestore Holdings - SAFE
A stock with a long-term trend dating back to January 2014. More recently, since price broke above a key pivot level at £8.87 in May last year, price has gained 37%. Price in January has pulled back, with a decline of 10.2%.
On the weekly time frame, price is trading above the 50 and 200 SMA, and the Sublime trend filter is green. This week price bounced off the pivot level at £12.13.
On the daily time frame below, the Sublime trend is red. Price is below the 20 and 50 SMA, but above the 200 SMA. We will continue to monitor this stock and share updates with our Phoenix community, should strength return.
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S&P 500
The year has started with weakness in the S&P 500: January declined by 5.8%. January is often a weak month for the S&P 500, particularly following strength into the end of the previous calendar year.
On the weekly time frame, price continues to trade above the 200 SMA, but price has weakened to the 50 SMA. This week price is displaying an indecision candle.
On the daily time frame below, price made a new all-time high at 4820 on 4 January, before price retreated to the 50 SMA. Price last week weakened further to close below all moving averages – the 20, 50 and 200 SMA. This week price has shown some strength to trade above the 200 SMA. The Sublime trend filter remains red. As stated in our initial commentary, we will wait to see if this is a short-term drop in price or a more sustained period of weakness.
US STOCKS
Apple - AAPL
Apple is one of the most popular stocks in the NASDAQ. It has a history of impulsive trends but does suffer periods of pullback and consolidation. On the monthly time frame, price was bullish following the pandemic where price moved from $60 to $130. However, since then the trend has been less linear. In November price broke out to create an all-time high, however, since then price weakened with a decline in January of 1.6%.
On the weekly time frame below, price is in a long-term uptrend with price trading above both the 50 and 200 SMA, and the Sublime trend filter remains green. Over the past two weeks price has bounced following last week’s decline.
On the daily time frame below, price has regained strength to close back above 20 and 50 SMA. The Sublime trend filter has switched from red to grey. A continuation pattern above the current all-time high could provide further opportunities before the $200 round number, the next area of resistance.
AmerisourceBergen - ABC
This stock has an interesting mix of strong trends and long periods of consolidation. Price showed strength in a trend from January 2013 to May 2015. However, since then price action has been mixed, despite a recent all-time high. December was the first month in several years which displayed a bullish breakout bar, culminating in a 14.8% gain. That momentum has continued into January with a further 1.2% gain to date. Price created a new all-time high on 11 January at $137.
On the weekly time frame, price is trading above the 50 and 200 SMA, and the Sublime trend filter is green.
On the daily time frame below, the Sublime trend filter is green, with price trading above the 20, 50 and 200 SMA. Price recently broke out above a pivot zone at $129 – $130, before retesting the level. The next area of major resistance is the $200 round number. We will monitor this stock to assess whether a linear trend can form, and we will update our Phoenix community accordingly.
Berkshire Hathaway - BRK.B
A stock with a history of trends lasting 1-2 years. We have discussed this stock in recent weeks, along with December’s newsletter – where we noted a potential breakout month. This assessment was correct, and price has subsequently made light work of the $300 round number, to create a new all-time at $323.
The Sublime trend filter is green on the weekly timeframe, and price is trending above the 50 and 200 SMA.
The daily time frame below shows an impulsive move since price bounced off the 200 SMA in early December. Price is currently trading above the 20, 50 and 200 SMA. The Sublime trend filter is currently green.. The longer the consolidation, the larger the breakout. With price breaking out from consolidation going back to May last year, we anticipate a strong trend to develop. We will update our Phoenix community on further opportunities in this trending stock.
ConocoPhilips - COP
A stock with a mixed history of trends and long periods of weakness. Price in February created a new all-time high of $93. Price was particularly bullish in January with a break out and gain of 23%.
On the weekly time frame, price is trading above the 50 and 200 SMA, and the Sublime trend filter is green.
On the daily time frame below, the Sublime trend filter is green. Price is trading above the 20, 50 and 200 SMA. The 20 and 50 SMA are diverging, indicating current strength. The next area of resistance is the $100 round number. We will monitor this stock and share updates with our Phoenix community.
McDonald’s – MCD
A stock with a mixed history of trends and long periods of consolidation. Price created an all-time high on 4 January at $271, but has subsequently weakened – with a decline in January of 3.2%.
On the weekly timeframe, price is above the 50 and 200 SMA, and the Sublime trend filter is green.
On the daily timeframe below, price is trading around the 20 and 50 SMA, but above the 200 SMA. This week the Sublime trend filter switched from grey to red. With earnings with week, price bounced off the pivot level at $247. The next area of resistance is the all-time high previously mentioned. Whilst to the downside there is support at 200 SMA. We will monitor this stock and update our Phoenix community accordingly.
McKesson - MCK
A stock with an interesting mix of strong trends and periods of consolidation. Between November 2012 to June 2015 price was in a very strong trend, gaining 150%. More recently, since price broke above the monthly pivot at $179 in March last year, price has also shown strength, with a gain to date of 38%.
On the weekly time frame, price is trading above the 50 and 200 SMA, and the Sublime trend filter is green.
On the daily time frame below, the Sublime trend filter is green. This week strength regained to close back above the 20 SMA. Whilst price also remains above the 50 and 200 SMA. In the past two weeks price has traded above both the previous all-time high set in May 2015 and the $250 minor round number. A continuation pattern above the current level could offer Phoenix members an opportunity in a stock with a history of strong trends. The next area of resistance is the $300 round number.
United Parcel Services - UPS
A stock with an interesting mix of strong trends and periods of consolidation. Following the pandemic, price showed strength however price has also experienced periods of consolidation along the way. This week price broke out with a gap up following earnings, resulting in a new all-time high at $234.
On the weekly time frame, price is trading above the 50 and 200 SMA, and the Sublime trend filter is green. This week price has been very bullish due to earnings mentioned above.
On the daily time frame below, this week the Sublime trend filter has switched from red to green. A continuation pattern above the current level could offer Phoenix members an opportunity in a stock with a history of strong, impulsive moves. The next area of resistance is the $300 round number.
This week the markets have shown signs of regaining strength as they move to the 200 SMA. Once price consolidates above this level in each index, we anticipate the bull trend, which commenced in 2008, will continue. We will continue to monitor our positions, and act according to our trading plan.
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Keep it simple. Keep it Sublime.
The ST Team
