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 likelihood of the recent bullishness abating, as the markets could move into a period of consolidation during the northern hemisphere summer. This week we have seen such a pullback.
Many traders will often panic during pullbacks, as they lack a process and alignment with the natural movement to price. Good investors simply look to support levels where the declines will find exhaustion.
We offer our Phoenix members the key teaching points to understand long-term price action, technical patterns, and market cycles. During periods of consolidation, savvy investors and traders will exercise patience, recognising that the markets never move in a straight line. We expect our patience will be rewarded, as it repeatedly has been in the past, with new opportunities along with compounding existing positions.
Looking deeper into the main indices:
- The S&P 500, this week price created a new all-time high at 4482, before a pullback in the latter part of the week to the daily 20sma.
- The Nasdaq 100 momentum paused again this week, with a pullback to the daily 50sma. Price remains just below the all-time high of 15,186.
- The Dow Jones 30, earlier in the week price created a new all-time high at 35,630, before a pullback to the daily 50sma.
- The FTSE 100 couldn’t sustain last week’s momentum, and this week also pulled back to close below the daily 20sma and 50sma.
The overall trend in the main indices remains bullish, and the probability remains weighted towards the continuation of the long-term bull trends established in 2009.
We continue to hold high-performing stocks in our portfolio, which we have been adding to during this round of breakouts. Good quality opportunities continue to present themselves, which allows us to diversify further. We continue to share setups and signals with our Phoenix members.
Let’s get into this week’s newsletter!
PS To get FREE lifetime access to our bespoke analysis tools used in these images and a host of other free essential goodies, complete the ‘Are You On Track To Retire Wealthy’ scorecard!
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 timeframe, for several months price has struggled to break above the pivot high from 2015 at 7124. Earlier this month price showed strength, however this week price has weakened to move back below this key level. The patience we have applied during this time should reward us with opportunities in stocks that break out from long periods of consolidation.
Following last week’s strength, where price reached 7221, an 18-month high, this week price has pulled back to support at the 7000 round number. The Sublime trend filter continues to remain green on the weekly timeframe, with price above both the 50sma and 200sma.
On the daily timeframe below, the pullback has resulted in price moving below both the 20sma and 50sma. Price has been moving sideways since 10 May this year, and this week the Sublime trend filter turned grey. However, our bias overall remains bullish, and we continue to look for stocks outperforming the Index.
UK STOCKS
Admiral Group - ADM
Overall price is looking strong. The strength displayed in July has continued in August, with a gain of 8% to date. This follows a growth of 7% in June. The next level of resistance is the £40 round number.
On the weekly timeframe, price is trading above the 50sma and 200sma, and the Sublime trend filter is green.
On the daily timeframe below, the Sublime trend filter is green and price is above the 20sma, 50sma and 200sma. Price was in a period of consolidation between 4th March to mid-July 2021, and has since broken out and formed a linear pattern. A continuation of this move could offer Phoenix members an opportunity before the next level of resistance.
Croda International - CRDA
A stock we have been trading since last year, this week price created an all-time high at £92.38. August performance to date has continued the momentum from July, with a 9% gain to date. Year to date price has increased by an impressive 39%.
On the weekly timeframe, price is trading above the 50sma and 200sma, and the Sublime trend filter is green.
On the daily timeframe below, price is above the 20sma, 50sma and 200sma, and the Sublime trend filter is green. The patience we have previously discussed is paying off, as there is evidence of a strong, linear trend. The bullishness of the trend is demonstrated by small pullbacks not reaching the 20sma. We will continue to share signals with our Phoenix members, particularly if we see such a trend develop towards the next round number at £100.
Dechra Pharmaceuticals - DPH
A stock with a good history of trends, price is currently in a strong uptrend. The momentum from July has continued into August, and this stock has gained 54% year to date.
On the weekly timeframe, the Sublime trend filter is green, and price is trading above the 50sma and 200sma. This week price has formed a bullish engulfing candle, an indication of strength.
On the daily timeframe below, price is above the 20sma, 50sma and 200sma, and the Sublime trend filter is green. Since price broke above the major pivot level of £32 in August 2020, price retested this level several times and has since formed a bullish trend, using the 20sma as support. A continuation pattern above the £50 round number could offer Phoenix members an opportunity in a good trending stock.
If you have watched the 4-part series and are keen to get started, then book yourself in for a 1-2-1 call with a member of the Sublime Trading team. |
S&P 500
To date, August has been a quiet month, with a small indecision candle. However, as we are only halfway through the month, the candle may change by month-end.
On the weekly timeframe, price continues to trade above the 50sma and 200sma, and the Sublime trend filter remains green. This week price created a new all-time high at 4482.
On the daily timeframe below, price is above the 50sma and 200sma. This week price pulled back to retest the 50sma and trade below the 20sma. The Sublime trend filter is grey. However, the bulls remain in firm control of the S&P, and we continue to look for stocks that are outperforming the index.
US STOCKS
Accenture - ACN
On the monthly time frame, price is bullish overall. The strength of the trend witnessed in July has continued into August, with a gain to date of 3.3%.
On the weekly timeframe, price is trading above the 50sma and 200sma, and the Sublime trend filter is green.
On the daily timeframe below, the Sublime trend filter is green and price is above the 20sma, 50sma and 200sma. Since price broke above the $300 round number, price has been using the 20sma as support. Keen observers will see a pattern of small trends followed by short periods of consolidation. This gives us confidence this stock has a predictable price structure. Price has plenty of room to move to the next area of resistance, being the $400 round number. We will continue to update our Phoenix community with signals in this high-performing stock.
Brown & Brown - BRO
The overall trend in this stock has been strong over a number of years. Prior to the pandemic price, rose to the $50 round number. This level became a strong area of resistance where price failed to break through in the latter part of 2020. In April this year, price broke out of resistance with a 16% gain, however price in May, June and July formed indecision candles. The candle for August is bullish.
On the weekly timeframe, price is above the 50sma and the 200sma and the Sublime trend filter is green.
On the daily timeframe below, price is above the 20sma, 50sma and 200sma, and the Sublime trend filter is green. Between 10th May and 27th July price was a period of consolidation. However, price has since broken out, used the 20sma as support and could be forming a linear trend. The next area of resistance is the $100 round number. A linear trend could offer Phoenix members an opportunity in a good trending stock.
Cubesmart - CUBE
A stock with a history of trends. Following the break out of five years of consolidation, price has made a bullish move with a 40% increase. July’s performance was a gain of 7%, whilst August is showing signs of continued strength.
On the weekly timeframe, price is trading above the 50sma and 200sma and the Sublime trend filter is green. Last week price closed above $50 for the first time in this stock’s history.
On the daily timeframe below, since breaking above the wPiv21 price has used the 20sma as support. The daily trend filter is green and price is above the 20sma, 50sma, and 200sma. Price is now developing into a potential long-term linear trend which it has also achieved in the past, increasing the likelihood of this occurring during the current trend. Now that the price has closed above $50, the next resistance area is the $100 round number. We will continue to update our Phoenix members as the trend develops further.
Edwards Lifesciences - EW
A stock in an overall trend, but with periods of pullbacks. Since price broke above the previous year high at $92 in April 2021, price has formed a linear trend. July’s gain of 8% has been followed up with a gain to date in August of over 5%.
On the weekly timeframe, price is trading above the 50sma, and the 200sma and the Sublime trend filter is green, confirming a bull trend in play.
On the daily timeframe below, price is trading above the 20sma, 50sma and 200sma. The Sublime trend filter is also green. Between April to June 2021 price formed a neat cup and handle formation and has since continued higher using the 20sma as support. We will continue to share signals with our Phoenix community, as price works its way towards the next level of resistance, being the $200 round number.
Kroger - KR
A stock with a mixed history, price was in a strong trend between 2013 and 2015. During August price has broken above a key level to create a new all-time high at $47.
On the weekly timeframe, price is trading above the 50sma and 200sma, and the Sublime trend filter is green.
On the daily timeframe below, the Sublime trend filter is also green, and price is above the 20sma, 50sma and 200sma. Whilst we have seen a break out this week, at this stage we need to apply patience and let price dictate. A linear trend could offer Phoenix members an opportunity in a stock that has historically provided very good profits.
Public Storage - PSA
A storage company in a strong trend. On the monthly timeframe, price continues to be bullish. Weakness earlier in the month has been met with support, resulting in a long wick below price. Price created a new all-time high this month at $324.
On the weekly timeframe, price is trading above the 50sma and 200sma and the Sublime trend filter is green. Since the breakout from consolidation in April, price retested the wPiv21 at $267, and has since moved higher.
On the daily timeframe, price is above the 20sma, 50sma and 200sma, and all MAs are angling up, demonstrating a strong trend is in play. The Sublime trend filter remains green. Price action is currently displaying higher highs and higher lows. A continuation of this pattern could offer Phoenix members an opportunity in this very bullish stock. We will share the relevant breakout and pullback signals.
SBA Communications - SBAC
An interesting stock with a mix of strong, impulsive trends and periods of consolidation. In July price broke above the previous year high at $328. The momentum has continued in August with a 5.5% gain to date.
On the weekly timeframe, price is trading above the 50sma and 200sma, and the Sublime trend filter is green.
On the daily timeframe below, the Sublime trend filter is also green, and price is above the 20sma, 50sma and 200sma. Since price broke above major resistance at $328, price has been using the 20sma as support. A linear trend could offer Phoenix members an opportunity in this stock which has a good history of trending for many months.
Another week of new all-time highs in the Dow and S&P, whilst it was a week of consolidation for the Nasdaq and FTSE. A good number of stocks continue to have record growth allowing our Phoenix members to compound and add more positions to the already profitable ones.
To get up to speed on how to accurately analyse the markets, consider completing the ‘Are You On Track To Retire Wealthy’ scorecard and unlock your FREE gift – Lifetime access to the Launchpad Investor Starter Kit priced £197 (+ VAT).
Keep it simple. Keep it Sublime.
The ST Team
