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 main indices consolidating above key technical levels, being the 200 simple moving average (SMA). This week price on all three US indices has moved back below these levels, however price remains within a range that was initially formed at the end of January. As a result, we are standing aside, waiting for price to dictate its next move.
As we said last week, our position remains that the bull market, which commenced in 2008, remains intact, but we are currently standing aside until a clear direction is formed in the main indices.
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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 has continued into 2022. December closed with a 4.6% gain, whilst January’s initial bullishness ultimately resulted in a modest gain of 1.1%. February also has been mixed, with initial strength pared back this week. To date, February is displaying a modest gain of 0.7%, with a large wick above price.
On the weekly time frame, the Sublime trend filter is green. Price is trading above the 50 and 200 SMA. This week price reached a key pivot level which has acted as resistance.
On the daily time frame below, during January price retreated to the 50 SMA where it found support. Price has subsequently bounced and is currently trading above the 20 SMA but below the 50 SMA. Price is also trading above the 200 SMA. The Sublime trend filter is green. Our overall bias remains bullish, and we continue to look for stocks outperforming the Index.
UK STOCKS
Diageo - DGE
This stock has a history of trends, however, there have been long periods of price reversals. On the monthly time frame, price retreated throughout January a key pivot level at 3634. Price in February has declined 1.7% to date.
On the weekly time frame, price is trading above the 50 and 200 SMA, and the Sublime trend filter is green. This week displayed an indecision candle.
On the daily time frame below, as mentioned, weakness in price resulted in it retreating this week to the 200 SMA, which coincides with the major pivot level mentioned above. The Sublime trend filter remains red. This is a stock to watch, but not one that is high on our watchlist, given its history of performance. We will share any signals with our Phoenix members.
Ferguson – FERG
A stock that has moved higher over time, but in the past has suffered deep pullbacks. On the monthly time frame, January displayed a sharp decline, whilst February is also displaying weakness to date with a 3.7% decline.
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 below the 20, 50 SMA but above the 200 SMA; as a result, the Sublime trend filter is red. This week price has found support at the 200 SMA; we will wait to assess whether this level holds. We will continue to share trading opportunities in this stock with our Phoenix community members.
St James’s Place – STJ
In early 2021 we highlighted this stock as one to watch, and it subsequently rewarded our Phoenix community with a strong, bullish move. Since July price has been in a range, and we await clear direction before committing to our next move.
On the weekly time frame, price has retreated to the 50 SMA and is above the 200 SMA. The recent weakness has resulted in the Sublime trend filter switching to grey.
On the daily time frame below, this week price has weakened further and is now trading below all MAs: 20, 50 and 200 SMA. The Sublime trend filter is red. We will continue to monitor and update our Phoenix members of opportunities if this trend develops further.
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S&P 500
The year has started with weakness in the S&P 500; January declined by 5.8%. January is often a weak month for the S&P 500, particularly following strength into the end of the previous calendar year. Whilst February is also displaying weakness with a 3.4% decline to date.
On the weekly time frame, price continues to trade above the 200 SMA, but price has weakened to now be trading below the 50 SMA. 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. Price is now trading below the 20, 50 and 200 SMA, and this week the 20 SMA crossed below the 200 SMA. The Sublime trend filter is red. As stated in our initial commentary, we will wait to fully assess the market. Our view is the long term bull trend from 2008 remains intact.
US STOCKS
AmerisourceBergen - ABC
This stock has an interesting mix of strong trends and long periods of consolidation. Price showed strength in a trend from January 2013 to May 2015. However, since then price action has been mixed, despite a recent all-time high. December was the first month in several years which displayed a bullish breakout bar, culminating in a 14.8% gain. That momentum continued into January with a further 2.5%, and February has also displayed a healthy gain to date of 3.9%. Price created a new all-time this week at $144.
On the weekly time frame, price is trading above the 50 and 200 SMA, and the Sublime trend filter is green. This week price is displaying a gain, albeit it is an indecision bar.
On the daily time frame below, the Sublime trend filter is green, with price trading above the 20, 50 and 200 SMA. In December last year price broke above a pivot zone at $129 – $130, before retesting the level. Price has since shown strength, gaining 9% since 26 January. The next area of major resistance is the $200 round number. We will monitor this stock to assess whether a linear trend can form, and we will update our Phoenix community accordingly.
American Express – AXP
A stock with a good history of trends that our Phoenix community has taken advantage of in the past. Price was in a period of indecision throughout December and January, but in later January and February (to date) strength has returned with gains of 9.9% and 8.4%.
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, this week price created a new all-time high at $196. Price is trading above the 20, 50 and 200 SMA, and the Sublime trend filter is also green. Price is immediately faced with resistance at the $200 round number. We will wait to assess how price responds to this level and will update our Phoenix community accordingly.
Berkshire Hathaway - BRK.B
A stock with a history of trends lasting 1-2 years. We have discussed this stock in recent weeks, along with December’s newsletter – where we noted a potential breakout month. This assessment was correct, and price has subsequently made light work of the $300 round number, to create a new all-time at $326. Similar to AXP, this stock has, to date, bucked the trend of weakness in the main indices.
The Sublime trend filter is green on the weekly time frame, and price is trending above the 50 and 200 SMA. Following the breakout described above, price retreated to the $300 round number and major pivot level and subsequently regained strength.
The daily time frame below shows an impulsive move since price bounced off the 200 SMA in early December. Price is currently trading above the 20, 50 and 200 SMA. The Sublime trend filter is currently green. The longer the consolidation, the larger the breakout. With price breaking out from consolidation going back to May last year, we anticipate a strong trend to develop. We will update our Phoenix community on further opportunities 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 13.3% to date.
On the weekly timeframe, price continues to trade above the 50 and 200 SMA, and the Sublime trend filter remains green. This week price is displaying an indecision candle, with a long wick below price.
On the daily timeframe 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 has now reached the $200 round number, and this week used the level as support, which coincides with the 20 SMA. We will update our Phoenix members of any opportunities in this stock.
Robert Half International - RHI
A stock with a mixed history of sustained trends but also deep pullbacks and corrections. Since the pandemic in March 2020, this stock has gained over 230%. After a period of indecision in recent months, strength has returned to date in February with a gain of 6.3%.
On the weekly time frame, price is trading above the 50 and 200 SMA, and the Sublime trend filter remains green.
On the daily time frame, price is above the 20, 50 and 200, and the Sublime trend filter remains green. Price is currently faced with resistance at the previous year high; a break and close above this level and the recent all-time high could offer Phoenix members an opportunity. This is not a stock at the top of our list but one to watch as it has good upside potential.
Raymond James Financial - RJF
This is a stock that has been in a strong trend for some time. Since breaking out above a key resistance level at $68 in February last year, price has gained 58%.
On the weekly time frame, the Sublime trend filter is green, and price is trading above the 50 and 200 SMA. Last week price displayed a reversal candle with a long wick above price, and this week price has weakened.
On the daily time frame below, price is trading above the 20, 50 and 200 SMA, and the Sublime trend filter is also green. This week price has retreated to the 20 SMA. With mixed price action we await a clear direction, with higher highs and higher lows. The next area of resistance is the $200 round number. We will monitor this stock and update our Phoenix community on any opportunities.
W.R. Berkley Corporation - WRB
WRB is a stock that has been in a long term trend, but the quality of the trend has not been particularly good. This stock also has a history of bullish moves higher before quickly retreating, such as during 2019 and 2020. More recently, price has been bullish since bouncing off a key pivot level at $82, gaining 9.6%.
On the weekly time frame, the Sublime trend filter is green. Price has shown indecision over the past two weeks. Price is trading above the 50 and 200 SMA.
On the daily timeframe below, price is trading above the 20, 50 and 200 SMA, and the Sublime trend filter is also green. Given the erratic price action described above this stock is not high on our watchlist, however, we will monitor it and update our Phoenix community should a trend emerge.
This week the markets have shown signs of further short-term weakness, with price closing below the 200 SMAs. We are currently standing aside, waiting for price to give evidence of a clear direction. As mentioned above, we anticipate the bull trend, which commenced in 2008, will continue. We will continue to monitor our positions, and act according to our trading plan.
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Keep it simple. Keep it Sublime.
The ST Team
