Welcome to our weekly newsletter, where we offer insights into stock setups that we share with our Phoenix members.
Last we discussed the importance of patience. This week this principle has been evidenced as the S&P 500 has pulled back to retest the daily 200 Simple Moving Average (SMA); a major technical level.
We will continue with the patience we discussed last week. Price using the daily 200 SMA as support would see price bounce off this level, followed by a continuation pattern.
At Sublime Trading we see patience as one of the key skills to successful trading. Continuation patterns are one of our arsenal that ensures we time the market, further adding to our ‘edge’.
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.
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, the first week of April has shown strength, with a gain to date of 2.1%.
On the weekly time frame, the Sublime trend filter is green. Price is trading above both the 50 and 200 SMA. The strength this week 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. Price strength this week has resulted in the 20 SMA crossing the 50 SMA. The Sublime trend filter is green. Our overall bias remains bullish, however, we are standing aside until the market direction becomes clearer.
UK STOCKS
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. Between February to April price has gained 12%.
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. 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 in April of 2.6% 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, 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.
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 4.9%.
On the weekly time frame, price is trading above the 50 and 200 SMA. The Sublime trend filter is green.
On the daily time frame below, the Sublime trend filter is green. Price is trading above all moving averages; 20, 50 and 200 SMA. The next area of resistance is the all-time high at £14.60. 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 started with weakness in the S&P 500; January declined by 5.8%. As previously mentioned, January is often a weak month for the S&P 500, particularly following strength into the end of the previous calendar year. This weakness continued into February resulting in a 2.8% decline, but with a large wick below price. March initially displayed weakness but strength has returned in recent weeks, resulting in a gain to date of 4.0%, however, there is a large wick below price to be aware of.
On the weekly time frame, price is trading back above both the 50 and 200 SMA. Over the past two weeks, price has displayed an indecision candle. 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 weakness, pulling back to the daily 200 SMA. 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 $165, confirming the breakout from December last year. In March price gained 7.9%, following gains between December to February 41%.
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.
Archer Daniels Midland Company - ADM
This stock has a mixed history. Since price broke above the previous year high at $70, price has been particularly bullish with a gain of 37%.
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. The moving averages are all aligned and angling up, indicating linearity in the current trend. The next area of resistance is the $100 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.
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 with a gain in April to date of 4.9%.
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 price broke out to create a new all-time high at $18.50. 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.
Extra Space Storage - EXR
Extra Space Storage is a stock that we traded in our Phoenix community throughout 2021. Price created an all-time high in December last year at $229, and subsequently declined in the first quarter of 2022. Weakness in January and February has been met with strength in March and April, with gains of 9.3 and 3.9% respectively.
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 with other stocks, price suffered during January and February. Price is trading above all moving averages; 20, 50 and 200 SMA. Importantly, the moving averages are aligned. The Sublime trend filter is green. Phoenix members will again be carefully monitoring this stock, to assess how price responds. A continuation pattern above the current level could offer another opportunity 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 15.3%.
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. Price made light work of the $200 round. We will update our Phoenix members of any opportunities in this stock.
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 100%.
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 week’s price retested the zonal area of the $200 round number. We will wait to assess whether price will use this level as support. A continuation pattern above the current level could offer Phoenix members an opportunity in a stock with a history of strong trends.
Public Storage - PSA
A storage company in a strong trend. Price created an all-time high at £412 this week. Price action has been particularly bullish with gains in March and April of 10.0% and 4.8% respectively. This week price closed above $400 for the first time.
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, price is above the 20, 50 and 200 SMA. The Sublime trend filter is green, and price is looking particularly bullish. Looking ahead, a continuation above the $400 round number could offer an opportunity in this very bullish stock. We will share any appropriate breakout and pullback signals with our Phoenix community.
This week the markets have taken a breather following their recent run. We are actively looking for opportunities and sharing them with our Phoenix community. currently standing aside, waiting for prices to give evidence of a clear direction.. 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
