Welcome to our weekly newsletter, where we offer insights into stock setups that we share with our Phoenix members.

This week the main indices regained their footing following September’s pullbacks. 

Many inexperienced traders and investors would have panicked during the recent pullbacks, in turn closing positions at a loss or closing positions prematurely. However, our approach to trading is to take advantage of long term trends, using a ‘Big Picture’ focus. This helps us keep positions open during pullbacks, and often take advantage of these market conditions by seeking pullback opportunities. 

This is the simple, yet stark difference between unsuccessful day trading and successful trend trading.

During the current bull run, which commenced back in 2009, there have been numerous examples of similar pullbacks, generally to areas of support, followed by the markets making new highs. This pattern has repeated itself so many times it is expected by seasoned trend traders such as those in our Phoenix community.

We expect the current pullbacks, where price has retreated to areas of support, to offer our Phoenix members opportunities, in both existing and new stocks.  

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 timeframe, September displayed an indecision candle, with large wicks both above and below the closing price. As we have discussed for several months, price has struggled to break above the pivot high from 2015 at 7124.

On the weekly timeframe, price has maintained its position above 7000 round number and 200sma. The Sublime trend filter is currently green but interchanging with grey in recent weeks, indicating indecision. At its current level, price remains in a period of consolidation, which commenced in April this year.

On the daily timeframe below, this week price traded around the 20sma and 50sma, but importantly above the 200sma. The Sublime trend filter is currently grey. Our overall bias remains bullish, and we continue to look for stocks outperforming the Index.

UK STOCKS

Greggs - GRG

This is a stock that has been in a strong uptrend since October 2020. In August price closed above the £30 round number for the first time, and the strength continued in September initially, before price pulled back to retest the round number. In October price also showed strength initially, but this week again pulled back into what is now an area of consolidation. 

On the weekly timeframe, price is trading above the 50sma and 200sma, and the Sublime trend filter is green. The current candle for this week is an indecision candle with an abnormally large wick both above and below price.

On the daily timeframe below, the Sublime trend filter is currently interchanging between green and grey indicating indecision. Price is currently trading around the intersection of the 20sma and 50sma, along with the £30 round number. This is the stock that has trended well over the past year and is currently experiencing a mini period of consolidation. A breakout above the current high of £32 and a continuation pattern could offer Phoenix members an opportunity in a stock that has performed very well over the past year.

JD Sports Fashion - JD

This is the stock that we have previously discussed in this newsletter. Following the pandemic, price has been in an uptrend however price action has been mixed with a combination of impulsive moves along with pullbacks. In September price was initially very bullish with a breakout and an all-time high, but since then price has retreated.

On the weekly timeframe, price is above the 50sma and 200sma, and the Sublime trend filter is green.

On the daily timeframe below, price is trading within the zone between the 20sma and 50sma, but importantly, price is trading above the 200sma. The Sublime trend filter is interchanging between grey and green, indicating decision. Following a gap up after recent earnings, price created an all-time high on the 15 September, but since then price has retreated to the 50sma and £10 round number. Phoenix members will be interested to see if the round number and moving averages will act as support, to enable price to continue its long-term trend.

 

Rentokil Initial - RTO

On the monthly timeframe, price has been in a long-term trend since May 2015. More recently, price has displayed bullishness since closing above the £5 round number. Price extended this bullishness to close above the £6 round number to create an all-time high, however, price has subsequently retreated.

On the weekly timeframe, price is trading above both the 50sma and, and the Sublime trend filter is green. As mentioned, price in the past three weeks has been pushed down by the bears to re-test the pivot level at £5.80.

On the daily timeframe below, price is currently trading between the 20sma and 50sma and is using both the pivot level previously mentioned and 50sma as support. If this level holds Phoenix members will be looking to see if price can regain its strength and continue the long-term trend.

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

The month of September closed with a bearish engulfing candle and a 4.9% loss. This represents the first monthly decline since January this year. In October the bulls to date have come in halted the decline. However, as it’s early in the month we need to apply patience, to assess how the remainder of the month plays out.

On the weekly timeframe, price continues to trade above the 50sma and 200sma, and the Sublime trend filter remains green.

On the daily timeframe below, this week price continued to trade predominately in the zone between the 50sma and 200sma. As a result, this week the Sublime trend filter has been interchanging between red and grey. Phoenix members will now apply patience, to assess whether price will find support, and then regain its position above the moving averages. Our overall view remains unchanged, that the bulls remain in firm control of the S&P and, as a result, we continue to look for stocks that are outperforming the index.

US STOCKS

AMN Healthcare Services - AMN

AMN is a stock that has been in a strong trend since the decline from the pandemic in March 2020; over the past 15 months, the stock has gained an incredible 160%. In August price was bullish with an increase in the month of 13%, whilst September saw a modest increase of 1%. In October, the bulls have returned and in just a few trading days price has gained over 3% and created an all-time high at $122.

On the weekly timeframe, price is trading above the 50sma and 200sma and the Sublime trend filter is green.

On the daily timeframe below, since price broke above a key pivot level at $90 in May this year, price has been using the 20sma as support, creating higher highs and higher lows. Price is currently trading above the 20sma, 50sma and 200sma, and the Sublime trend filter is green. Given the recent pullbacks across the markets, this stock has performed very well, and Phoenix members will be monitoring it closely for opportunities.

Avis Budget Group - CAR

A stock that has a mixed history of impulsive trends along with long periods of consolidation. In early 2013 this stock created a trend that ran for two years. Price subsequently went into a long period of consolidation before breaking out again in February this year. In September price was extremely bullish with a gain of 28%, and this has been followed up in October with a gain to date of 10%.

On the weekly timeframe, price is trading above the 50sma 200sma, and the Sublime trend filter is green.

On the daily timeframe below, price created an all-time high in June this year but subsequently went into a period of consolidation. In September price initially broke out but pulled back to retest the pivot level and 20sma before breaking out again. Price is now in a linear trend, trading above the 20sma 50sma to resume, and the Sublime trend filter is green. Phoenix members will be watching this stock closely and considering new opportunities.

Cadence Design Systems - CDNS

CDNS is a popular stock in our Phoenix community, with members holding multiple positions. The stock has a long history of trends dating back to 2011. Since April 2020 Price has been in an impulsive trend moving from $75 to over $150. In August price gained over 10%, however, this was pared back with a pullback in September of over 7%.

On the weekly timeframe, price is trading above the 50sma and 200sma and the Sublime trend filter is green. Price is currently at a strong pivot level which coincides with the $150 round number.

On the daily timeframe below, prices are currently trading below the 20sma and 50sma, but importantly, trading above the 200sma. The Sublime trend filter is red. Phoenix members will be watching the stock closely to see if the $150 round number will hold as support. A bounce off this level could offer a pullback opportunity in this trending stock.

Hilton Worldwide Holdings - HLT

HDL is a stock with a mixed history of trends followed by deep pullbacks. However, there is some evidence that a linear trend could be forming. Price in September performed well with a gain of 5.8%, whilst in October to date price has also performed well, also with a gain of over 5%.

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 has been in a period of consolidation since February this year, however, price has recently shown signs of momentum. Price is currently trading above the 20sma, 50sma and 200sma, and the Sublime trend filter is green. Given the length of time of the recent consolidation period, Phoenix members will apply patience and assess further price action.

Live Nation Entertainment - LYV

LYV is a stock with a history of good trends. From 2013 to 2014 and 2017 to 2019 this stock performed well with strong trends. More recently, price was in a long period of consolidation, but over the past three months, price has once again been bullish, with an increase of more than 30%.

On the weekly timeframe, the Sublime trend filter is green, and price is trading above the 50sma and 200sma.

On the daily timeframe below, price has been in consolidation since March this year. However, price has recently broken out of consolidation and is displaying signs of bullish momentum. Price this week closed above the $100 round number and created an all-time high. Price is trading above all moving averages, and the Sublime trend filter is green. With price closing above a major round number, Phoenix members will have this stock high on their watchlist.

Nike - NKE

Nike is a stock that we have discussed several times in this newsletter and is currently in an interesting position. Price recovered strongly following the immediate impacts of the pandemic and was bullish throughout the remainder of 2020. In June and July price was particularly bullish with strong gains, however, these have been pared back during September.

On the weekly timeframe, price is trading above the 50sma and 200sma. Price is crucially positioned at the pivot high from October 2020 which also coincides with the $150 round number along with the weekly 50sma.

On the daily timeframe below, price is trading below the 20sma and 50sma and the Sublime trend filter is red. However, crucially, as mentioned, price is trading above a strong area of support. Phoenix members will be watching this stock closely, to assess whether support will hold.

Tractor Supply Company - TSCO

TSCO is a stock that has been traded in the Phoenix community since price broke above the $150 round number and the previous year high at $156. Since then, price has formed a bullish move to the upside, culminating in an all-time high on 23 September at $214.

On the weekly timeframe, price is trading above the 50sma and 200sma, and the Sublime trend filter is green. This week price pulled back to test a key level of support – the pivot high from May this year.

On the daily timeframe below, price has been in a period of consolidation since May this year which is the pivot high previously mentioned. Price broke out from this level but subsequently retreated and is currently trading between the 20sma and 50sma. Price is currently above the 200sma, and the Sublime trend filter is grey. Phoenix members will apply patience to assess, whether price can regain its footing above the $200 round number. If so, this could provide further opportunities in this trending stock.

Whilst the markets have been broadly weak during September, this was to be expected given the bullish moves in July and August. The first week of October has shown signs of the markets finding their footing. The economy is showing good signs of recovery and a good number of stocks continue to have record growth. As a result, our Phoenix members will continue to compound and add more positions to their already profitable portfolios.

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 £297 (+ VAT). 

Keep it simple. Keep it Sublime.

The ST Team


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