This current period of correction has continued through this week with further declines in the stock market. However, the indices and stocks, in general, found support on Thursday with strong moves to the upside. A bullish end to Friday could potentially mean a strong end to March.
Seasonally speaking, during a period of trend, the run-up to the summer months can see stocks breakout and push onto further new ATHs offering further opportunities to add new stocks and compounds into the portfolio to the positions we still have in play since last year.
Corrections and pullbacks in the market are always a challenge to deal with for those with no system. Top callers once again would be calling tops but as always that won’t last long.
Here at Sublime Trading, we are very much in tune with the natural movement of the market and not only expect pullbacks but embrace them as where people panic and sell, the smart apply patience and buy. This is what we have been doing during this first quarter of 2021.
We are still waiting for the S&P 500 to break and close above 4000 and will continue to monitor market conditions closely for either a reversal but more likely a bull trend continuation.
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.
Let’s move into this week’s newsletter.
Here is 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
- 888 Holdings – 888
- Ashtead Group – AHT
- Polar Capital Technology Trust – PCT
- Automatic Data Processing – ADP
- American Express – AXP
- Berkshire Hathaway – BRK.B
- Brown & Brown – BRO
- CubeSmart – CUBE
- Honeywell International – HON
- Texas Instruments – TXN
FTSE 100
Little change on the FTSE 100 with price continuing to remain inside consolidation. Overall, March is still looking bullish with a move of over 3.5% from the open.
The weekly timeframe sees price still trading below the 200sma as resistance and above the 50sma as support. The Sublime trend filter still remains green.
On the daily timeframe below, we can see the pullback to the 20sma and the 50sma zonal support area which is holding strong and is preventing price from further weakness. The Sublime trend filter is alternating between mostly green and grey confirming a sideways market. A close above the 2018 support level by the end of the month (next week), a level price has failed to close above since December, will be a sign that the market is finally looking to push higher. We will continue to focus on the best-performing bullish stocks.
The UK stocks that have made it onto this week’s newsletter are:
(click on charts to open in a new window)
UK STOCKS
888 Holdings – 888
A new stock to the watchlist following a circa 30% move to the upside taking price onto new ATHs and currently trading above the £4 round number. This stock does not have the most prolific history of trends but the trend in play since the recovery from CV19 from March of last year is looking strong.
On the weekly timeframe, price is trading above the 50sma and the 200sma and the Sublime trend filter is green confirming the emergence of a trend above the previous ATH of May 2018.
On the daly timeframe below, price is trading above the 20sma, the 50sma and the 200sma with all 3 MAs angling up confirming the emergence of a bull trend. The Sublime trend filter is green and in alignment with the weekly timeframe. The signs are all pointing to further strength. However, the trend structure itself is choppy and so we will wait to see more in the trend before considering signals for our Phoenix members and positions for the portfolio.
Ashtead Group – AHT
A stock that continues to hold well through the current market correction with further new ATHs this week. March has seen a bullish move of over 10% with current price action still trading around these ATHs.
The weekly timeframe sees price still trading below the 200sma as resistance and above the 50sma as support. The Sublime trend filter still remains green.
On the daily timeframe below, price continues to trade above the 20sma, the 50sma and the 200sma with all 3 MAs angling up confirming a bull trend. Price has moved over 40% since the breakout from consolidation in November and so a correction is due. When that comes in, price will dictate. We shared a new breakout signal with our Phoenix members this week and will continue to do so as long as price keeps pushing higher.
Polar Capital Technology Trust – PCT
The £20 round number continues to hold strong as support through this correction. March was looking 8% bearish at its peak but the bulls have so far halted any further weakness.
On the weekly timeframe, the pullback has found support at the 50sma and a November 2020 pivot level. The trend filter has continued to remain grey since February but this is expected during pullbacks and corrections.
On the daily timeframe below, we can see a choppy chart where investors have to apply patience and resilience with whipsaw movement up and down since June last year. Current price action sees comfort around the 200sma. Price is also trading below the 20sma and the 50sma and the Sublime trend filter is red. This would have many panicking assuming the market has finally topped out but this is nothing more than consolidation in an overall bull trend. Patience needed for now.
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
With the $4000 round number still holding strong as resistance, the pullback from last week has continued through this week with a further drop in price to the 50sma. However, Thursday’s price action saw a complete intraday reversal ending the day bullish at support, a sign of a possible end to the pullback and strength back to the upside. The month of March is still over 2.5% bullish.
The weekly timeframe continues to remain bullish with price trading above the 50sma and the 200sma and the Sublime trend filter continuing to show green.
On the daily timeframe below, we can see the pullback to the MAs which are holding strong as a support zone with Thursday’s candle closing above the 20sma and the 50sma. With price still trading above the 200sma, the overall bias remains bullish. However, the Sublime trend filter continues to alternate between green and grey confirming a consolidation. A bullish end to the week and the month (next week) is likely to see strength back to the $4000 round number.
US STOCKS
Automatic Data Processing – ADP
A 6.5% move to the upside in March taking price above the high of 2020 and onto new ATHs.
On the weekly timeframe, price is trading above the 50sma and the 200sma and the Sublime trend filter is green confirming the emergence of a trend above the previous ATH of February 2020.
On the daily timeframe below, we can see the breakout from consolidation in more detail followed by the pullback to retest resistance as support, classic price action movement. The next breakout will suggest further strength but it is a break and close above $200, a major round number acting as resistance directly above price once confirmed as support, that will pique our interest for entry points. Price action is above the 20sma, the 50sma and the 200sma with all 3 MAs angling up and the Sublime trend filter is green confirming the start of a bull trend from consolidation. A stock that has all the hallmarks of a potential top-performer given its history. We will monitor this closely and time our entry accordingly sharing signals with our Phoenix members.
American Express – AXP
Bullish, then bearish and now signs of potential bullishness again with price pulling back, finding support and bouncing off the high of 2020.
On the weekly timeframe, price is trading above the 50sma and the 200sma and the Sublime trend filter is green confirming the emergence of a trend above the previous ATH of January 2020.
On the daily timeframe below, we can see the move up through resistance with price then testing the $150 round number, the pullback to support through March and the bounce and move to the upside on Thursday. Again, this is all very natural to price action and movements that are expected by good investors. The next BO will suggest a continuation to the upside and when this will be of interest to us and when signals will be shared with our Phoenix members.
Berkshire Hathaway – BRK.B
Little change from last week with price still in its pullback phase and trading around the $250 round number. This set up according to the rules of our pullback strategy and the signal was shared with our Phoenix members.
On the weekly timeframe, price is trading above the 50sma and the 200sma and the Sublime trend filter is green confirming a bull trend is still in play.
On the daily timeframe below, price is above the 50sma and the 200sma but the pullback has dipped below the 20sma which is perfectly normal during pullbacks. The Sublime trend filer has remained green throughout the pullback. We now apply patience as we wait for our pullback position to move into profit and we will then consider compounds and sharing further signals with our Phoenix members.
Brown & Brown – BRO
A stock that has performed very well for us in the past most recently in the bull run prior to the declines caused by CV19 last year. Since then, price has recovered well pushing back to those current ATHs but has remained in consolidation.
On the weekly timeframe, price is trading above the 50sma and the 200sma and the Sublime trend filter is alternating between green and grey confirming a consolidation in an overall bull trend.
We can see this in more detail on the daily timeframe below. The Sublime trend filter has been alternating between green, grey and red since last year confirming a consolidation but has remained above the 200sma throughout apart from the very temporary dip below in February and most recently this month. The 20sma and the 50sma are flat also confirming a consolidation but the 200sma is still angling up confirming a bull trend overall. Current price action is displaying bullishness which means very little until we see a confirmed breakout above the current ATH. This is a cheap stock with an excellent history of performance and excellent upside potential, one we monitor weekly for a potential breakout.
CubeSmart – CUBE
A 2370% move to the upside between 2009 and 2016 is why this is on our watchlist. February saw price breakout from consolidation since 2018 and print new ATHs. March has remained in consolidation during this period of correction in the market.
On the weekly timeframe, price is trading above the 50sma and the 200sma and the Sublime trend filter is green confirming the emergence of a trend above the previous ATH of August 2019.
On the daily timeframe below, we can see the consolidation zone price has been in since printing new ATHs. Price is holding above pivot support and currently trading above the 20sma, the 50sma and the 200sma. The Sublime trend filter is alternating between green and grey confirming a mini consolidation for now. This is a cheap stock with an excellent history of performance and excellent upside potential and one we will share signals on with our Phoenix members once this meets our investment plan.
Honeywell International – HON
A move of over 6.5% in March has seen price attempt to break out from this period of consolidation it has been in since December and when we first added this into the portfolio.
On the weekly timeframe, price is trading above the 50sma and the 200sma and the Sublime trend filter is green confirming a bull trend is still in play despite being in consolidation.
On the daily timeframe below, we can see the sideways market price has been in since the gap up from earnings back in November. We have had to apply some patience with this stock but this is all part and parcel of investing. We are only in control of our decisions up until we enter the stock into the portfolio. What happens next is beyond us and where the rules of probability come into play. The longer the consolidation the bigger the breakout and so we simply wait for price to dictate the next breakout and trend and use the power of compounding to catch up for lost time. We will continue to share signals with our Phoenix members once price dictates the next breakout and trend continuation.
Texas Instruments – TXN
A stock that has moved around 35% since the breakout from consolidation in August 2020 and now pushing to new ATHs with the move of over 6% so far in March. Quite a turn around in price this month which had dropped by 7% at the start of the month.
On the weekly timeframe, price is trading above the 50sma and the 200sma and the Sublime trend filter is green confirming a bull trend is still very much in play since the breakout last year.
The daily timeframe below shows a choppy trend in play since the breakout with the Sublime trend filter even turning red earlier this month. The recovery once price found support has been swift, pushing price above the 20sma and the 50sma and we could even end the week with a confirmed breakout and further new ATHs. The overall bias is bullish with price trading above the 200sma which was always a suggestion that this pullback was likely to be short-term. We now wait for further strength and ideally a move towards and a break and close above $200. This is setting up for further strength and we will continue to share signals with our Phoenix members on both breakouts and pullbacks.
The week was strong in the stock market and we saw the Dow Jones create a new all-time high. The S&P is edging ever closer to the $4000 round number and new sectors are leading the way forward including the ‘Financials’ sector.
Make sure to check in next week to stay up to date with the progress of the recovery in the markets and don’t forget to join our FREE Launchpad Facebook group.
Keep it simple. Keep it Sublime.
The ST Team
