Welcome to our weekly newsletter, where we offer insights into stock setups that we share with our Phoenix members.
Last week we described the perfect storm of war, inflation and economies recovering from the covid pandemic; resulting in significant volatility in the financial markets. This week the markets have shown signs of stability and possible recovery.
As mentioned last week, our view of the best way to manage through periods such as these is via knowledge. At Sublime Trading we ensure our trading and investing community gains the necessary education before using our proven strategies and tools in the markets.
Our trading principles are based on price and price action. We do not try to explain, nor predict, price movements. Price is always right; the most reliable indicator. We continue to stand aside during this period, whilst we await clear direction. As standing aside is a conscious action in itself, we continue our daily routine of monitoring the markets.
Our position remains that the bull market, which commenced in 2008, remains intact. During this bull run, we have seen multiple instances of reversals, but price has repeatedly recovered.
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 has made a volatile start with initial weakness matched by recent strength, resulting in a large wick forming below price which we will monitor.
On the weekly time frame, the Sublime trend filter remains grey. Price is trading back above both the 50 and 200 SMA.
On the daily time frame below, since price failed at a key pivot level on 10 February this year, price has displayed weakness. Price this week shot higher, to close back above the 20 and 200, but remains below the 50 SMA. Also, the SMAs are not aligned; the 20 SMA is trading below the 50 SMA. This week the Sublime trend filter switched from red to grey. Our overall bias remains bullish, however, we are standing aside until market direction becomes clearer.
UK STOCKS
Ashtead Group - AHT
A trending stock we have repeatedly discussed in this newsletter and with our Phoenix community. Price was bullish throughout 2021 but has been weak in 2022. Strength has resumed in March with a gain to date of 12.5%.
The Sublime trend filter this week switched from red to grey. Price closed above the 50 SMA this week.
On the daily time frame below, the Sublime trend filter also changed this week, in this case from grey to green. Price is trading above the 20 and 50 SMAs but below the 200 SMA. We will monitor this stock to assess if the recent strength can continue. A break and close above the 200 SMA could offer an opportunity, but we will apply patience given the general market turbulence.
National Grid – NG.
A stock we have not discussed in the newsletter before; price has a history of trends, but not the cleanest price action. Since price broke above last year’s high, price has shown strength. In February price gained 4.7% whilst in March price is currently displaying an indecision candle.
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 below all MAs: 20, 50 and 200 SMA. The Sublime trend filter is green. This week price maintained its position above the 20 SMA. There is potential immediate resistance ahead at £11.50; we will monitor this stock, and update our Phoenix members on opportunities.
Safestore Holdings - SAFE
A stock with a long-term trend dating back to January 2014. In 2021 price broke above a key pivot level at £8.87 and created an all-time high at £14.60 on 4 January this year. However, since then price has been weak, resulting in a decline peaking at 24% but regaining its footing, reducing the decline to 11%.
On the weekly time frame, price is trading above the 50 and 200 SMA. The Sublime trend filter switched back from grey to green.
On the daily time frame below, the Sublime trend is grey. Price is trading above all moving averages; 20, 50 and 200 SMA, however, the 20 SMA is trading below the 50 SMA. We will continue to monitor this stock and share updates with our Phoenix community, should recent strength continue.
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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. The weakness continued into February resulting in a 2.8% decline, but with a large wick below price. March initially displayed weakness but strength regained this week, resulting in a modest gain of 0.2% and a large wick below price.
On the weekly time frame, price continues to trade above the 200 SMA, but price continues to trade below the 50 SMA. This week the Sublime trend filter switched back from red to grey.
On the daily time frame below, price made a new all-time high at 4820 on 4 January, before weakening. Price gained some strength this week to trade back above the 20 SMA but continues to trade below the 50 and 200 SMA. We could be seeing the first signs of the recent pattern of lower highs and lower lows being broken. As stated in our initial commentary, we will wait to fully assess the market. 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. Price this week created a new all-time high of $150, confirming the breakout from December last year. March to date is displaying a gain of 7.3%.
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 20, 50 and 200 SMA. Since price broke out following earnings on 3 February, price has been using the 20 SMA as support. The next area of resistance is the $200 round number. A continuation pattern above the current level 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 in January and February of 2.5% and 4.7% respectively; March has gained 6.8% to date.
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 week price closed above the (minor) $150 round number. This stock is evidence that select stocks are performing well, despite broad market weakness. We will monitor this stock and update our Phoenix community accordingly.
Assurant - AIZ
The next US stock is Assurant. On the monthly time frame, price has been bullish overall since November 2008 and is currently trading above last year’s high at $176.
On the weekly time frame, the Sublime trend filter is green and price is above the 50 and 200 SMA. Price broke above the Piv21 level which was at $172 this week.
On the daily time frame below, the Sublime trend filter is green and price is above the 20, 50 and 200 SMA. As mentioned above, the recent breakout could see this stock move higher. Given the general pattern of deeper-than-ideal pullbacks, this stock is not top of our list, but we will continue to monitor it and 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 high this week at $345. Similar to ABC, this stock has, to date, bucked the trend of weakness in the main indices.
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 regained 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 20, 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. We will update our Phoenix community on further opportunities in this trending stock.
Crown Holdings - CCK
This is a stock that has been in a broad bull trend over a number of years, however there have been many pullbacks that present this stock as not ideal. We generally prefer to see a more linear history of trends. Since the pandemic, price has been in a strong bull run with a gain of 124%.
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, this week price moved back above the 20 SMA; price is also trading above the 50 and 200 SMA. The Sublime trend filter is green. This week price created an all-time high at $128. The next area of resistance is the $200 round number. We will update our Phoenix members of any opportunities in this stock.
Cincinnati Financial - CINF
A stock with a mixed history, price was in a strong trend between 2011 and 2016, and again throughout 2019. However, this stock was severely impacted by the pandemic, decreasing in value by some 61%. Price subsequently regained strength and this week created a new all-time high at $133.
On the weekly timeframe, price is trading above the 50 and 200 SMA, and the Sublime trend filter is green. This week price broke out from consolidation.
On the daily time frame below, the Sublime trend filter is also green, and price is above the 20, 50 and 200 SMA. The moving averages are all aligned. The next area of resistance is the $200 round number. Whilst we have seen a breakout this month, at this stage we need to apply patience and let price dictate. A linear trend could offer Phoenix members an opportunity.
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 66%.
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, trading above the 20, 50 and 200 SMA. The next area of resistance is the $300 round number. A continuation pattern above the current level could offer Phoenix members an opportunity in a stock with a history of strong trends.
This week the markets have displayed signs of weakness abating. We are currently standing aside, waiting for prices to give evidence of a clear direction. As mentioned above, we anticipate the bull trend, which commenced in 2008, will continue. We will continue to monitor the markets, and act according to our trading plan.
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Keep it simple. Keep it Sublime.
The ST Team
