This week we are relaunching our newsletter in a new format. We have consulted with our readership and have been working on this format for some time. We are very excited about the launch, along with the further insights it will provide to our approach.
The newsletter will have three sections; an overview of the main US and UK indices, a selected stock with deep analysis, and finally an analysis of a stock we have in our portfolio including a discussion on the returns the stock is generating for our Phoenix members.
Let’s get into this week’s newsletter!
The FREE Facebook Community called the Launchpad is a great place to get involved in conversations around stocks mentioned in this newsletter and opportunities that may arise during the week.
US & UK INDICES OVERVIEW
The three US indices – S&P 500, Nasdaq 100, and Dow Jones 30 – all peaked in early January and all have declined throughout 2022, by 17%, 26% and 13% respectively. All three indices are trading below the daily 200 simple moving average (SMA).
May’s monthly candle for all indices is displaying indecision. However, we are not currently considering short positions, as all indices are above the weekly 200 SMA and we believe the long term trend, which commenced in 2008, is the dominant market direction.
The UK index we track, the FTSE 100, has performed significantly better in 2022, with a modest gain to date of 0.6%. However, price action has been very volatile with price trading between 6788 and 7688 – a range of 13%. May’s monthly candle is currently showing a decline of 1.7% with a large wick below the price.
OUTPERFORMING STOCKS FOR THE WATCHLIST
Coca Cola - KO
The three US indices – S&P 500, Nasdaq 100, and Dow Jones 30 – all peaked in early January and all have declined throughout 2022, by 17%, 26% and 13% respectively. All three indices are trading below the daily 200 simple moving average (SMA). May’s monthly candle for all indices is displaying indecision. However, we are not currently considering short positions, as all indices are above the weekly 200 SMA and we believe the long term trend, which commenced in 2008, is the dominant market direction.
The UK index we track, the FTSE 100, has performed significantly better in 2022, with a modest gain to date of 0.6%.
However, price action has been very volatile with price trading between 6788 and 7688 – a range of 13%. May’s monthly candle is currently showing a decline of 1.7% with a large wick below the price.
PERFORMANCE REVIEW
McKesson - MCK
McKesson Corporation is a stock with an interesting mix of strong trends and periods of consolidation. Between November 2012 to June 2015 the stock was in a powerful trend, gaining 150%. More recently, since the price broke above the monthly pivot at $179 in March last year, the price has also shown strength, with a gain to date of 82%.
On the weekly time frame, the price is trading above the 50 and 200 SMA, and the Sublime trend filter is green. Whilst on the daily time frame the Sublime trend filter is also green. Price is currently using the zonal area between the 20 and 509 SMA as support, and trading above 200 SMA.
We first entered MCK in early January and have since compounded three times to have four positions in total. The total return to date is 5.5% using a total risk of 2%. This stock is a good example of trending stocks in a volatile market. The total amount of time taken to set up and manage this trade has been less than one hour – this is the benefit of trend trading using a higher time frame such as monthly, weekly and daily charts.
Looking Ahead
This week the markets have continued to demonstrate volatility. However, we are actively looking for opportunities such as MCK and sharing these with our Phoenix community for good returns.
Keep it simple. Keep it Sublime.
