A mixed bag this week with some stocks pulling back and with others breaking out creating new all-time highs.
Those pulling back are finding support and are very likely to correct and move back to the upside in line with the overall bullish direction of the market.
There is an element of uncertainty moving forward with price on the S&P 500 faced with resistance in the form of the $4000 round number. When price is in a bull trend, resistance levels are likely to be broken but we, of course, need price to dictate that, never predict as this is how money is lost.
Any resistance is very likely to be short-term given that price has been in a bull trend since 2009 and the trend is your friend until the bend at the end.
A break and close above $4000 will be significant for the next leg up towards $5000.
We continue to remain bullish until price dictates otherwise and will manage our open positions accordingly.
We will continue to focus on the best-performing stocks, those out-performing the indices, until then.
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.
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
- Admiral Group – ADM
- Polar Capital Technology Trust – PCT
- Next – NXT
US Stocks
- Bershire Hathaway – BRK.B
- Caterpillar – CAT
- Deere & Co – DE
- Generac Holdings – GNRC
- HubSpot – HUBS
- Intuit – INTU
- Western Alliance Bancorp – WAL
FTSE 100
A strong start to the week saw price move up around 2.5% taking price above the resistance-now support level of 2018. The rest of this week has seen price pull back to retest this level as support which we would like to see hold strong and encourage a bounce to the upside which will take price through the 7000 round number and the weekly 200sma which are both key resistance levels above price.
The weekly sees price continue to trade between the 50sma as support and the 200sma as resistance and the trend filter remains green confirming the trend is still bullish despite price consolidating.
On the daily timeframe below, price is trading above the 200sma and is back above the 50sma and the 20sma but currently finding immediate support at the 50sma. A close above all the MAs by the end of trading on Friday will be a positive sign for further strength to the upside. Patience needed for now.
The UK stocks that have made it onto this week’s newsletter are: (click on charts to open in a new window)
UK STOCKS
Admiral Group – ADM
A stock that does have the potential to trend but also has the very real potential to swing to the downside and remain in lengthy periods of consolidation. The current trend in play has moved around 35% since the breakout in August of last year moving from around £25 to the £30 round number. February has seen a move of over 7% taking price above the high of last year and onto new ATHs.
The weekly timeframe continues to display bullishness with price trading above the key moving averages of the 50sma and the 200sma and the Sublime trend filter is green confirming a bull trend is still very much in play.
On the daily timeframe below, price is also above the key moving averages of the 20sma, the 50sma and the 200sma and the Sublime trend filter continues to remain green confirming alignment between the 2 timeframes. Looking at the trend in play in more detail on the daily, the pullbacks are deep making the trend choppy and so not the smoothest of rides for investors. A stock that may be more suited to a pullback strategy as opposed to a breakout one unless the trend becomes a more linear one.
Polar Capital Technology Trust – PCT
Price action in February had seen a bullish move of over 6% taking price above the high of last year and onto new ATHs but a decline of around 5% has seen price move back below the high of 2020 which is now resistance. But not all is lost and this is nothing but a pullback for now.
The weekly timeframe continues to display bullishness with price trading above the key moving averages of the 50sma and the 200sma and the Sublime trend filter is green confirming a bull trend is still very much in play.
On the daily timeframe below, price is also above the 200sma confirming the overall price is still bullish. However, the pullback of this week has taken price below the 20sma but is finding support at the high of September of last year and the 50sma. The trend filter has turned grey as a result of the pullback. PCT showed promise between March and July of last year but since then has been choppy and very much a slow-moving trend. We will continue to share signals with our Phoenix members with a recent compound entered into the portfolio but we would ideally like to see the trend neaten out and be supported by the 20sma moving forward. Patience needed but returning good profit at the moment.
Next – NXT
Little change on this stock since it last featured in our weekly newsletter but one we monitor closely for a potential breakout. Price currently is still finding immediate resistance at the current ATH of 2015. The trend prior to consolidation moved around 225% showing why this is on our watchlist of potentials.
The weekly timeframe continues to display bullishness with price trading above the key moving averages of the 50sma and the 200sma and the Sublime trend filter is green confirming a bull trend is still very much in play.
On the daily timeframe below, price is trading above the 50sma and the 200sma but declines this month have taken price below the 20sma. The trend filter remains green and price continues to trade above the Piv21 support level of 2019. Price stuck between resistance and support. With the overall trend being bullish, we favour a break and close above the current ATH and when we will start considering signals to be shared with our Phoenix members.
Now is the perfect time to start preparing for when stocks do make a move. A recovery in this index will mean we can start looking to place long trades. Further declines and we can start looking to short stocks like we did back in 2008.
The market is poised to hand out some unique opportunities for excellent profit and growth for those who have learned to position themselves correctly.
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
A short week this week with Monday being a bank holiday in the US to celebrate Presidents’ Day. The rest of the week has seen price trade inside a mini range with a new ATH being printed just short of the $4000 round number. We continue to wait to see how price reacts to this key level of resistance with our preference of course being a break and close above and strength towards $5000. This will allow us to continue to hold onto our long positions and even add more into the portfolio.
The weekly timeframe continues to display bullishness with price trading above the key moving averages of the 50sma and the 200sma and the Sublime trend filter is green confirming a bull trend is still very much in play.
On the daily timeframe below, price is also above the key moving averages of the 20sma, the 50sma and the 200sma and the Sublime trend filter continues to remain green confirming alignment between the 2 timeframes. How Friday closes will be a sign of what to potentially expect next week.
US STOCKS
Berkshire Hathaway – BRK.B
A move of around 15% has seen price move through the high of last year and onto new ATHs taking price to $250 where it is finding resistance. Price is now also trading out of a period of consolidation which stretches back to January 2018 which will act as a base for the next leg up once $250 has been confirmed as support.
The weekly timeframe is displaying bullishness with price trading above the key moving averages of the 50sma and the 200sma and the Sublime trend filter being green confirming that start of a bull trend.
On the daily timeframe below, price is also above the key moving averages of the 20sma, the 50sma and the 200sma and the Sublime trend filter is also green confirming alignment between the daily and weekly timeframes and the start of the next leg up. This is on our watchlist for potentials for the portfolio and we will start sharing signals with our Phoenix members once this meets our investment plan. Patience for now.
Caterpillar – CAT
A stock that displays all the signs of one that will likely return a profit. It has a good history of performance, it is creating new ATHs, it has good volume and it has also just broken out from consolidation. Price is also now also trading above the high of last year, trading above the $200 round number and printing new ATHs with a move of over 12% to the upside so far in February.
The weekly timeframe continues to display bullishness with price trading above the key moving averages of the 50sma and the 200sma and the Sublime trend filter is green confirming a bull trend is still very much in play.
On the daily timeframe below, price is also above the key moving averages of the 20sma, the 50sma and the 200sma and the Sublime trend filter continues to remain green confirming alignment between the 2 timeframes. The next breakout signal that meets our trading plan will be considered for the portfolio and signals will be shared with our Phoenix members.
Deere & Co – DE
A good example of why we do not close off positions before earnings with price gapping up and creating new ATHs despite the pullbacks off this week. A classic example of price action before and after earnings. February has seen a move of around 15% so far pushing price towards $350.
The weekly timeframe is displaying bullishness with price trading above the key moving averages of the 50sma and the 200sma and the Sublime trend filter being green confirming a bull trend is still very much in play.
On the daily timeframe below, price is also above the key moving averages of the 20sma, the 50sma and the 200sma and the Sublime trend filter is also green confirming alignment between the daily and weekly timeframes. This stock has moved around 65% since we first entered this into the portfolio and started sharing signals with our Phoenix members. We will continue to do so as long as price continues to create new ATHs. A top-performer to date.
Generac Holdings – GNRC
A stock that has moved over 43% since the start of the month taking price onto new ATHs and above $350 and now starting to return some decent profit since we started sharing signals with our Phoenix members.
The weekly timeframe is displaying bullishness with price trading above the key moving averages of the 50sma and the 200sma and the Sublime trend filter being green confirming that a bull trend is very much in play.
On the daily timeframe below, price is also above the key moving averages of the 20sma, the 50sma and the 200sma and the Sublime trend filter is also green confirming alignment between the daily and weekly timeframes. Given how much price has moved this month, we are likely to see a period of consolidation in the near future. When that happens is down to the forces of the market but until then we will continue to share signals with our Phoenix members.
HubSpot – HUBS
Last Friday saw price gap up over 16% on earnings taking price above $500. Another example of why we do not close positions prior to earnings with stocks that are in our portfolio. This is an expensive stock and not one for all account sizes but one that still has plenty of upside potential towards $1000.
The weekly timeframe is displaying bullishness with price trading above the key moving averages of the 50sma and the 200sma and the Sublime trend filter being green confirming that a bull trend is very much in play.
On the daily timeframe below, price is also above the key moving averages of the 20sma, the 50sma and the 200sma and the Sublime trend filter is also green confirming alignment between the daily and weekly timeframes. We now need to apply patience and let price dictate if it breaks out further to the upside or starts to fill the gap first before further moves to the upside as the overall market is bullish now and is yet to display signs of strong weakness. We will continue to share signals with our Phoenix members when the right signals appear.
Intuit – INTU
Price has moved over 16% since the start of the month taking price above the high of last year, above $400 and onto new ATHs. An expensive stock that does have a history of performing well for investors.
The weekly timeframe is displaying bullishness with price trading above the key moving averages of the 50sma and the 200sma and the Sublime trend filter being green confirming that a bull trend is in play.
On the daily timeframe below, price is also above the key moving averages of the 20sma, the 50sma and the 200sma and the Sublime trend filter is also green confirming alignment between the daily and weekly timeframes. Price, however, has been choppy with swings in the trend since breaking out from consolidation in July. However, the trend is showing signs of becoming more linear meaning a smoother ride ahead. Currently, price is pulling back to retest the $400 round number which may offer a pullback entry point. Patience needed for now as price confirms a direction.
Western Alliance Bancorp – WAL
A fairly cheap stock trading at $85 that has moved over 310% since the low of March of last year and over 26% this month taking price onto new ATHs.
The weekly timeframe is displaying bullishness with price trading above the key moving averages of the 50sma and the 200sma and the Sublime trend filter being green confirming that a bull trend is very much in play.
On the daily timeframe below, price is also above the key moving averages of the 20sma, the 50sma and the 200sma and the Sublime trend filter is also green confirming alignment between the daily and weekly timeframes. Price has trended very well since breaking out from consolidation and when we first started sharing signals with our Phoenix members. Price is now likely to continue towards $100 after which a break and close above this major round number will be significant for further moves to the upside. A good stock for the portfolio.
TAs we close off the week we are seeing some strong moves in stocks despite the S&P pulling back this week. If the stocks close strong by the end of the trading day then our phoenix members will be rewarded with many breakout opportunities for next week.
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Keep it simple. Keep it Sublime.
The ST Team
