As we approach mid-May, the indices are showing signs of finding support and potentially exhaustion to this recent round of pullbacks.
- The S&P 500 is bouncing off the daily 50sma.
- The Nasdaq 100 is finding support at the high of 2020.
- The Dow 30 is bouncing off the zonal area between the daily 20sma and 50sma.
- The FTSE 100 is bouncing off the high of January this year.
A close above these levels by the end of Friday will be a vital sign of further strength back to the upside. However, we require breakouts across the board to confirm a continuation of the bull trend.
During these periods, there is the customary panic from unsophisticated investors and gamblers with money on the line but no process in place. There is also the usual excitement from those who put ego and social media clout before profit, calling yet another top.
Good investors remain calm, ignore the noise, apply patience and wait for the market to find support. We not only expect pullbacks but embrace them as they offer entry points buying into stocks using a pullback strategy.
Where the herd is panicking and selling, the few remain calm and buy.
Once the markets break out and continue to print new ATHs, we will add further positions using a breakout strategy. This is how portfolios are made, and large life-changing compounded growth is achieved safely.
With that said, 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
FTSE 100
An indecision candle so far on the monthly timeframe with a bullish start followed by a pullback this week but price is now bouncing off support. Overall, price has remained inside a mini area of consolidation, but this is not surprising given the bullish moves of March and April.
On the weekly timeframe, at the time of writing, price is trading above the 200sma and the 50sma. A close above the 200sma by the end of the week will be significant for further momentum to the upside. The next major resistance directly above price is from 2015. The Sublime trend filters on the daily and weekly have both been green and aligned since March, suggesting that further momentum to the upside was always likely. It was just patience that was needed to let price confirm that.
On the daily timeframe below, price is using the 20sma as support and still trading above both the 50sma and the 200sma. All three MAs are still angling up and aligned. We now await to see how Friday closes.
UK STOCKS
Ashtead Group - AHT
A stock that is rising and creating new ATHs. Since the beginning of this month, Ashtead has gained around 4.25%. It is continuing to create a smooth pattern to the upside, which we want to see in a stock.
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, the 50sma, and the 200sma. The Sublime trend filter is also green. The daily and weekly timeframes are aligned. Price is now just short of the £50 mark. A break and close above this level will be significant when we continue to share signals with our Phoenix members.
Big Yellow Group - BYG
May has seen price move over 8.5% taking it through the high of last year and onto new ATHs. A new emerging trend makes this a very appealing stock.
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 bull trend.
On the daily timeframe below, price is trading above the 20sma, the 50sma, and the 200sma. The Sublime trend filter is also green. The daily and weekly timeframes are aligned, confirming bullishness. Once our investment plan has been met, we will start sharing signals with our Phoenix members. The first major area of resistance above price is the £20 round number. There is plenty of space for a trend to develop.
Safestore Holdings - SAFE
A move of over 6% from the opening price of May still sees price trading above the high of last year despite the 7% pullback. Price is still holding above the high of last year.
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 bull trend.
On the daily timeframe below, price is trading above the 20sma, the 50sma, and the 200sma. The Sublime trend filter is also green. The daily and weekly timeframes are aligned, confirming bullishness. This week’s pullback sees price retesting the high of last year as resistance-turned-support, which we want to see price hold above. A bounce to the upside followed by a break and close above the £10 round number and further confirmation in the trend is when we will start sharing signals with our Phoenix members. Patience 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
A 12% move to the upside since February means a pullback was imminent. May has seen price decline around 2%, with price pulling back towards the $4000 round number that it had yet to retest as resistance-turned-support.
On the weekly timeframe, price continues to trade 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 failed to hold at the 20sma and has now pulled back to the 50sma. This key MA is currently holding strong as support. With price trading above the 200sma and the Sublime trend filter back to green after turning grey, we continue to remain bullish and look for the best-performing stocks outperforming the indices. We are poised to execute our pullback strategy, sharing signals with our Phoenix members.
US STOCKS
Ametek - AME
A 20% rise since February meant price was due a pullback. May has seen a 4% correction since the high.
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 trading above the 200sma and the 50sma. This week’s pullback has taken price between the 20sma and the 50sma, but the Sublime trend filter has remained green, confirming this is nothing more than a pullback for now. We can only apply patience at this point and wait for price to dictate the next breakout. We will continue to share signals once the trend resumes.
Brown & Brown - BRO
A move of over 16% in March took price out of consolidation, onto new ATHs and close above the $50 round number. May has seen a decline of around 4% to retest key resistance levels as support.
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 bull trend.
On the daily timeframe below, price is still trading above the 200sma and the 50sma. However, the pullback has filled the gap created in April and is using the low of the gap and the daily 20sma zonal area as support. A close above the 20sma by the end of the week will be a sign of a continuation back to the upside. This is a stock that has performed well for us in the past. We will share signals following the next breakout once our investment plan has been met.
Eastman Chemical - EMN
A stock that has been little impacted by the pullbacks this week. May has seen a circa 10% move the upside, which has taken price out of consolidation 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 a bull trend is in play.
On the daily timeframe below, the Sublime trend filter is green, and price is trading above the 20sma, the 50sma, and the 200sma. Alignment across the weekly and daily timeframe is a strong sign the trend is likely to push towards $200. We will continue to share signals with our Phoenix members with further breakouts.
Facebook - FB
A 25% move between March and April took price out of consolidation, above $300 and onto new ATHs. This has been followed by a circa 8% correction in May to retest the high of last year as resistance-turned-support.
On the weekly timeframe, price is trading above the 50sma, and the 200sma and the Sublime trend filter is green, confirming an emerging bull trend is in play.
On the daily timeframe, price is trading above the 50sma and 200sma. This week’s pullback sees price retesting the high of August 2020, the 50sma and the $300 zonal area as support. The pullback has also filled the gap created in April following a positive reaction to earnings. We now wait for price to bounce off this level and breakout so we can consider sharing signals with our Phoenix members.
FedEx - FDX
December and January saw declines of circa 23%. Price found support in February, and a move of circa 30% sees price now attempting to print 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 bull trend from consolidation.
On the daily timeframe below, the pullback of this week is holding at the 20sma as support. The 50sma and the 200sma continue to angle up and confirming bullishness. If price can hold above $300 and break and then gather momentum to break and close above the current ATH of May, we are likely to see price push towards $400. Patience for now.
Old Dominion Freight Line - ODFL
A 40% plus rise from the low of February to the high of May meant a pullback was due. This week has seen a circa 4.5% correction.
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, the trend in play has been linear and well supported by the 20sma, a trend follower’s dream structure. This week’s pullback has seen price find support at the 20sma, which is often the first level to hold strong during a correction. The Sublime trend filter has remained green. A close above the 20sma by the end of the week will be a positive sign of strength back to the upside. The 20sma, the 50sma and the 200sma remain aligned, angling up, confirming the bull trend. This is a stock we have been sharing signals on with Phoenix members and will continue to do so moving forward.
Snap-On - SNA
A 6.5% move to the upside in May adding to the circa 35% move to the upside since breaking out from consolidation in February. Price has held well through this market correction.
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, the trend in play has been linear and well supported by the 20sma, a trend follower’s dream structure. The pullback of this week has seen price find support around the $250 round number. The Sublime trend filter has remained green, and the 20sma, the 50sma, and the 200sma remain aligned, angling up, confirming the bull trend. This is a stock we have been sharing signals on with Phoenix members and will continue to do so moving forward.
Not only are stocks finding support, but we are also seeing early signs of a bounce to the upside. The next round of breakouts will confirm a recovery and a continuation of the bull trend. If your portfolio could be doing better, now is the time to correct that. Stay up to date and get involved in conversations on market events by joining our FREE Launchpad Facebook group.
Keep it simple. Keep it Sublime.
The ST Team
