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

This is the first newsletter of 2022. As a recap, below is a summary of the performance of the main indices during 2021. On the surface, it was a stellar year for the equity markets, but a deeper review demonstrates the performance is not that uncommon. 

Since 1928, the S&P has recorded gains of more than 15% on 35 occasions or 38% of the time. More recently, since 2003 there have been 19 years of gains and 3 years of declines (including the Great Financial Crisis which resulted in a 38% decline in 2008). And since the most recent annual decline in 2018, the S&P has recorded annual gains of 29%, 16% and 27%, which includes the covid pandemic crisis.

  • The S&P 500: 2021 annual gain of 26.9%, the all-time high of 4811;
  • The Nasdaq 100: 2021 annual gain of 20.1%, the all-time high of 16771;
  • The Dow Jones 30: 2021 annual gain of 18.9%, the all-time high of 36710;
  • The FTSE 100: 2021 annual gain of 9.3%, the all-time high of 7904.

At Sublime Trading, we have a clear trading plan that governs our approach. This is the value of our education programme, where we teach members the right techniques to manage in all market conditions.

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 January. December closed with a 4.6% gain and January’s bullishness has already resulted in a 1.4% gain. Price has now broken out of last year’s range and the next major area of resistance is the monthly pivot level at 7727.

On the weekly time frame, the Sublime trend filter is green. Price is trading above the 50 and 200 simple moving averages (SMA).

On the daily time frame below, this week price broke above the pivot level at 7402. Price is now trading clear of the 20 and 50 SMA. Last week the 20 SMA crossed the 50 SMA, a sign of bullishness. The Sublime trend filter is green. Our overall bias remains bullish, and we continue to look for stocks outperforming the Index.

UK STOCKS

Big Yellow Group - BYG

This stock has a history of trends, however, trends haven’t been the most linear when compared to high-quality trending stocks. On the monthly time frame, price suffered a pullback in September, but strength regained between October to December with total gains of 24%.

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, since price closed above a key pivot level at £15.88, momentum has been building. This resulted in a new all-time high at £17.60 on 31 December. This week price pulled back to the zonal area between the 20 and 50 SMA. The Sublime trend filter is green. 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.

Croda International - CRDA

A stock we have been trading since last year. In September price retreated by 7%, however, October resulted in a reversal with a bullish engulfing candle. Price in November continued this momentum with a further gain of 7%. Price created an all-time high on 14 December at £105.06, but has since weakened.

On the weekly time frame, price is trading above the 50 and 200 SMA, and the Sublime trend filter is green. This week price has reached an important pivot level at £93.58.

On the daily time frame below, the Sublime trend filter is red with price trading below both the 20 and 50 SMA. Price remains above the 200 SMA. As mentioned above, proce is at an important pivot level, and we will watch to see if this area acts as support. We will share updates with our Phoenix community.

 

St James’s Place – STJ

We recently highlighted this stock as one to watch, and it subsequently rewarded our Phoenix community with a strong, bullish move. The momentum in December (8.7% gain) has continued in January, resulting in an all-time high this week at £17.43.

On the weekly timeframe, price is above the 50 and 200 SMA, and the Sublime trend filter is green. This week price made an attempt to close above a key pivot level at 16.97, but failed.

On the daily timeframe below, as mentioned above, this week price made a new all-time high. Price is trading above the 20, 50 and 200 SMA, and the Sublime trend filter is green. At this stage we anticipate the moving averages to act as support, and the current trend to continue. We will continue to update Phoenix members of compound opportunities as this trend develops further.

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

As mentioned in the introduction, the S&P recorded a gain in 2021 of 26.9%. This included 68 all-time highs, the second-most ever. During 2021, price also tagged the daily 50 SMA on 12 separate occasions, demonstrating that pullbacks often occur as a natural movement in price. January has commenced with weakness, which was also the situation in 2021.

On the weekly time frame, price continues to trade above the 50 and 200 SMA, and the Sublime trend filter remains green.

On the daily time frame below, price made a new all-time high at 4820 on 4 January, before price retreated back to the 50 SMA. As a result the Sublime trend filter is grey. Price is above the 200 SMA. Whilst the structure of the moving averages remains intact, with the 20 SMA above the 50 SMA, which is above the 200 SMA. 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

Apple - AAPL

Apple is one of the most popular stocks in the NASDAQ. It has a history of impulsive trends but does suffer periods of pullback and consolidation. On the monthly time frame, price was bullish following the pandemic where price moved from $60 to $130. However, since then the trend has been less linear. In November price broke out to create an all-time high, however, price subsequently pulled back to retest the previous year high at $139. Since then price has been bullish, with gains in November and December of 10% and 7% respectively.

On the weekly time frame below, price is in a long-term uptrend with price trading above both the 50 and 200 SMA, and the Sublime trend filter is green.

On the daily time frame below, price retreated during September to retest the previous year high at $139, then price climbed higher creating a series of higher highs and higher lows, culminating in an all-time high this week. The Sublime trend filter is green, and price is trading above the 20, 50 and 200 SMA. Price created an all-time high on 4 January at $183, in turn resulting in a total valuation of over $3 trillion. This stock has been discussed several times in the Phoenix community. A continuation pattern above the current all-time high could provide further opportunities before the $200 round number, the next area of resistance.

Berkshire Hathaway - BRK.B

A stock with a history of trends lasting 1-2 years. We last discussed this stock in this newsletter in December 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 on Friday at $320.

The Sublime trend filter is green on the weekly timeframe, and price is trending above the 50 and 200 SMA.

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 green. The longer the consolidation, the larger the breakout. With price breaking out from consolidation going back to May last year, we can expect 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 January. 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.

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

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 borke above a key pivot level at $183 on 8 December, price has made an impulsive move higher. Price is now likely to make its way towards the $200 round number, the next area of potential resisitance. We will update our Phoenix members of any opportunities in this stock.

Lowes Companies - LOW

A stock with a history of impulsive trends, going back to 2016. In December price created an all-time high at $263. Price is currently in a mini period of consolidation, with price holding above the $250 minor round number.

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

On the daily timeframe below, price is trading above the 50 and 200 SMA, and the Sublime trend filter is also green. In January price has pulled back to the area between the 20 and 50 SMA. We will wait to see if this area acts as support. The next area of resistance is the $300 round number. We will continue to discuss opportunities in this stock with our Phoenix community members.

McDonald’s - MCD

A stock with a mixed history of trends and long periods of consolidation. In December price was particularly bullish, with a monthly gain of 9.6%. In January price created a new all-time high at $271. 

On the weekly time frame, price is above the 50 and 200 SMA and the Sublime trend filter is green.

On the daily time frame below, price is above the 20, 50 and 200 SMA and the Sublime trend filter is also green, confirming alignment with the weekly timeframe. Over recent months the periods of consolidation have been shorter, indicating that this stock may be ready to form a linear trend. Following this most recent breakout, price has bounced off a minor pivot level and formed a strong rebound. We will monitor the stock for signs of a linear trend, and update our Phoenix community accordingly. The next area of resistance is the $300 round number.

Proctor & Gamble Company - PG

A stock with long periods of bullish momentum, but equally characterised by deep, sharp pullbacks. Price in November created a new all-time high, and that momentum has continued into December, with a further gain of 13.4%. In January price made a new all-time high at $165.

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

On the daily time frame below, price is trading above the 20, 50 and 200 SMA. The Sublime trend filter is green. Since price broke above a key pivot level at $147, price has made an impulsive move higher. The next area of resistance is the $200 round number. A close above the current level could offer an opportunity, however, we need to be aware that we have earnings on 19 January. We will apply patience and monitor this stock, and update our Phoenix members if an opportunity arises.

Tractor Supply Company - TSCO

This is a stock that has been traded in the Phoenix community since price broke above the $150 round number and the previous year’s high at $156. Since then, price has formed a bullish move to the upside, culminating in an all-time high this week at $240.

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, in September price retreated to the $200 round number and has subsequently moved higher, using the 50 SMA as support. Price is currently again at the 50 SMA and we will assess this position, to see if the moving average will again act as support. Phoenix members will continue to monitor this stock for further opportunities. The next major area of resistance is the $300 round number.

This week the markets have pulled back to areas of support, which is to be expected after a new all-time high. We will continue to monitor our positions, and act according to our trading plan, including taking new opportunities and compounding existing positions.

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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