Welcome to our weekly newsletter, where we offer insights into stock setups that we share with our Phoenix members.
Last week we discussed the importance of patience, as the S&P 500 pulled back to retest the daily 200 Simple Moving Average (SMA); a major technical level. This week volatility in the markets has continued and, as a result, the principles of patience remain important.
In recent weeks we have seen increases in the number of UK and US stocks creating new highs and passing our initial filtering process – this is a sign that the broad weakness seen throughout 2022 may be coming to an end. There are opportunities available, with the right screening process and knowledge of how to invest in these markets.
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 initially continued into 2022, however, weakened this month. March was a volatile month, with initial weakness matched by latter strength, resulting in a very large wick forming below price. By comparison, April has shown modest strength, with a gain to date of 1.3%.
On the weekly time frame, the Sublime trend filter is green. Price is trading above both the 50 and 200 SMA. Recent strength has pushed price up, close to a key pivot level at 7692.
On the daily time frame below, since price failed at a key pivot level on 10 February this year, price displayed weakness. The Sublime trend filter is green. In this shortened trading week price was in a tight range. Our overall bias remains bullish, however, we are standing aside until the market direction becomes clearer.
UK STOCKS
Diageo - DGE
This stock has a history of trends, however, there have been long periods of price reversals. On the monthly time frame, price retreated throughout January to a key pivot level at 3634. Price subsequently moved lower but strength returned in April with a 2.6% gain to date.
On the weekly time frame, price is trading at the 50 SMA and above the 200 SMA; the Sublime trend filter is green.
Whilst price is showing strength on the monthly time frame, on the daily time frame below, weakness this week resulted in price retreating to the 20 SMA. The Sublime trend filter remains green. 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.
National Grid – NG
A stock we first discussed several weeks ago; price has a history of trends, but not the cleanest price action. Since price broke above last year’s high at £10.93, price has shown strength, gaining 8.8%. The monthly candle is currently displaying indecision, which we will monitor.
On the weekly time frame, the Sublime trend filter is green and price is trading above both the 50 and 200 SMA.
On the daily time frame below, this week’s price continues to trade above all SMAs; 20, 50 and 200 SMA. The Sublime trend filter is green. The next area of resistance is the £20 round number. As mentioned, we will monitor this stock, and update our Phoenix members on opportunities.
RELX - REL
A stock that is in an overall uptrend since August 2012, however, like many stocks, has had a volatile start to 2022. Indecision in January and February initially continued into March, however, the bulls have stepped in, resulting in a 4.5% gain in March, followed by a gain to date in April of 2.4%.
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, price is also trading above the 20, 50 and 200 SMA. The Sublime trend filter is green. In early March price used a major pivot level at £21 as support, subsequently gaining 16%. We will monitor this stock and update our Phoenix community members if a trend forms above the current all-time high at £24.51.
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S&P 500
The year started with weakness in the S&P 500, with a decline to date of 8.6%. As mentioned in the opening statement, patience is required, as we await price to dictate our next move. Strength in March has been offset by weakness to date in April.
On the weekly time frame, price is trading back below the 50 SMA, but remains above the 200 SMA. The Sublime trend filter is grey.
On the daily time frame below, price made a new all-time high at 4820 on 4 January, before weakening. Recently, price has shown a mix of days of strength and weakness, reflecting the volatility previously discussed. Price is currently trading below all moving averages. Our view is that the long term bull trend from 2008 remains intact.
US STOCKS
AbbVie Incorporated - ABBV
A stock with a mixed history of trends and long periods of weakness. After last week’s all-time high, this week’s price has weakened. As a result, the monthly candle is currently displaying indecision.
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 also green. Price is trading above the 50 and 200 SMA. Since price broke out following earnings on 3 February, price has been using the 20 SMA as support. However this week’s price pulled back below the 20 SMA, however, we will monitor to assess if this is a pullback. The next area of resistance is the $200 round number. A continuation pattern above the all-time high could offer an opportunity, which we will share with our Phoenix community.
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 continued in 2022 with gains between January and March with a gain of 17%, whilst April is currently also displaying a gain, of 4.2%.
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, and price is trading above the 20, 50 and 200 SMA. This stock is evidence that select stocks are performing well, despite broad market volatility. We will monitor this stock and update our Phoenix community accordingly.
Arthur J. Gallagher - AJG
This is a stock that has a history of long term trends. Price created an all-time high in December at $171, however, like most stocks, price has displayed weakness in January with a 6.9% decline. Strength returned in March with a 10.4% gain, followed up by a gain in April to date of 3.4%.
On the weekly time frame, price continues to trade above 200 SMA. This week the Sublime trend filter switched from grey to green.
On the daily time frame below, this week’s price broke out to create a new all-time high at $185. The Sublime trend filter is green. We will monitor this stock to assess whether a trend can form following this breakout. We will update our Phoenix members 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 subsequently made light work of the $300 round number, to create a new all-time high in March of $362.
The Sublime trend filter is green on the weekly time frame, and price is trending above the 50 and 200 SMA. Following the breakout described above, price retreated to the $300 round number and major pivot level and subsequently found strength.
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 50 and 200 SMA, and the Sublime trend filter is 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, but patience is required during general market volatility. We will update our Phoenix community on further opportunities in this trending stock.
Hershey Company - HSY
Hershey is another stock with a strong performance in December that has continued into 2022. Whilst the historic performance is mixed, this stock has evidence of trending for long periods, as evidenced by the trend that occurred between February 2011 to March 2014. Since December last year price has been bullish with a gain of 27%.
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 20, 50 and 200 SMA, and the Sublime trend filter is also green. Since price broke above a key pivot level at $183 on 8 December, price has made an impulsive move higher. With earnings on 28 April we will monitor this stock and update our Phoenix members of any opportunities.
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 82%.
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 currently using the 20 SMA as support, and trading above the 20, 50 and 200 SMA. This stock is another example of trending stocks in a volatile market. A continuation pattern above the current level could offer Phoenix members an opportunity in a stock with a history of strong trends.
W.R. Berkley Corporation - WRB
WRB is a stock that has been in a long term trend, but the quality of the trend hasn’t been particularly good. This stock also has a history of bullish moves higher before quickly retreating, such as during 2019 and 2020. More recently, price has been bullish since bouncing off a key pivot level at $55, gaining 24%.
On the weekly time frame, the Sublime trend filter is green. Price has shown strength over the past six weeks. Price is trading above the 50 and 200 SMA.
On the daily timeframe below, price is trading above the 20, 50 and 200 SMA, and the Sublime trend filter is also green. Given the erratic price action described above, this stock is not high on our watchlist, however, we will monitor it and update our Phoenix community should a trend emerge.
This week the markets have continued to demonstrate volatility. However, we are actively looking for opportunities and sharing them with our Phoenix community.
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Keep it simple. Keep it Sublime.
The ST Team
