Welcome to our weekly newsletter, where we offer insights into stock setups that we share with our Phoenix members.
This week the main indices continued the pullbacks we have discussed in recent weeks. With September now complete, we can fully assess the impacts on the longer timeframes, which we consider to be the best guides of price action.
During the current bull run, which commenced back in 2009, there have been numerous examples of similar pullbacks, generally to areas of support, followed by the markets making new highs. This pattern has repeated itself so many times it is expected by seasoned trend traders such as those in our Phoenix community.
We expect the current pullbacks, where price has retreated to areas of support, to offer our Phoenix members opportunities, in both existing and new stocks.
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 timeframe, September displayed an indecision candle, with a large wick both above and below the closing price. As we have discussed for several months, price has struggled to break above the pivot high from 2015 at 7124.
On the weekly timeframe, price has maintained its position above 7000 round number 200sma. The Sublime trend filter is currently green but interchanging grey in recent weeks, indicating indecision. At its current level, price remains in a period of consolidation, which commenced in April this year.
On the daily timeframe below, this week price traded around the 20sma and 50sma, eventually ending the week below both moving averages. The Sublime trend filter is currently grey. Our overall bias remains bullish, and we continue to look for stocks outperforming the Index.
UK STOCKS
Ashtead Group - AHT
A trending stock we have repeatedly discussed in this newsletter and with our Phoenix community. In July price took a breather from the bullish trend, which commenced in mid-2020. Strength returned in August and initially in September, culminating in a new high at £62.84. However in the latter part of the month price weakened, resulting in an indecision candle, with a large wick above price.
The Sublime trend filter is green on the weekly timeframe, and price remains above the 50sma and 200sma.
On the daily timeframe below, the Sublime trend filter is also grey, and following the pullback, price this week closed below the 20sma and 50sma but remains above the 200sma. If price can regain its position above the moving averages and then break above the all-time high, the long term trend could remain intact. The next area of resistance is the £100 major round number. We will continue to update our Phoenix community on this high-performing stock.
Croda International - CRDA
A stock we have been trading since last year, this month price has retreated 9.8% from the recent all-time high, to close at the level from the July month close.
On the weekly timeframe, price is trading above the 50sma and 200sma, and the Sublime trend filter is green.
On the daily timeframe below, price is below the 20sma and 50sma, but well clear of the 200sma. This week the Sublime trend filter has turned red, although price action has been very mixed. We will continue to monitor this stock and, if the trend can re-emerge, opportunities could develop which we will share with our Phoenix community. The next area of resistance is the £100 round number.
JD Sports Fashion- JD
A stock with a strong history of trends, particularly between November 2013 and May 2017. Following the pandemic, price moved higher, however price action has not been particularly clean. More recently, the close above the £10 round number resulted in an impulsive move higher. A gap up following earnings last week initially resulted in a gain in September, however, weakness in the latter half of the month pared that gain back to 3.9%.
On the weekly timeframe, price initially broke out above the pivot high and prior year high at £8.90, before pulling back to use this level as support. Price this week pulled back to the £10 round number. Price is currently above the 50sma and 200sma, and the Sublime trend filter is green.
On the daily timeframe below, price is trading below the 20sma, but above the 50sma and 200sma. As a result, the Sublime trend filter is grey. Our Phoenix community will be interested to see if price can hold above the £10 round number. The next area of resistance is the £20 round number.
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S&P 500
The month of September closed with a bearish engulfing candle and a 4.9% loss. This represents the first negative month since January this year. This result is not unexpected, nor unwelcome, as it should provide pullback opportunities for our Phoenix community members.
On the weekly timeframe, price continues to trade above the 50sma and 200sma, and the Sublime trend filter remains green.
On the daily timeframe below, this week price traded below both the 50sma and 200sma. The Sublime trend filter has displayed a mix of grey and red. We now wait to see if price will continue its pullback or recover to regain its position above the moving averages. 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
Arthur J Gallagher – AJG
On the monthly timeframe, the trend is bullish and has been bullish since January 2016 and price is looking strong. This stock has been largely unaffected by September’s pullback and is within reach of the current all-time high at $154.36.
On the weekly timeframe, the Sublime trend filter is green and price is above the 50sma and 200sma. This week’s candle, with a long wick below price, indicates the bulls have pushed price back up following weakness earlier in the week.
On the daily timeframe below, the Sublime trend filter is also green, indicating alignment with the weekly timeframe. Price is above the 20sma, 50sma and 200sma. Following the all-time high created on 24th September, price retreated to the 20sma where it found support. A breakout above the all-time high, followed by a continuation patter could offer Phoenix members an opportunity in a high performing stock. The next area of resistance is the $200 round number.
Ameriprise – AMP
Price was in a strong trend between November last year and April this year, gaining some 60%. However, in recent months price action has been mixed; August saw a gain of 6% resulting in an all-time high, whilst September saw a loss of 3%.
On the weekly timeframe, price continues to trade above the 50sma and the 200sma. The Sublime trend filter remains green.
On the daily timeframe below, price is currently trading above the 20sma, the 50sma and the 200sma. The Sublime trend filter is currently grey. Price is currently in an area of consolidation. Price is currently faced with an all-time high. A break above this level, along with the $300 round number could off Phoenix community members an opportunity in a stock that has traded well in the past.
AON – AON
On the monthly timeframe, price is looking bullish overall, with a gain of 22% since price broke above the previous year high at $238 in April this year.
On the weekly timeframe, the Sublime trend filter is green and price is above the 50sma and 200sma.
On the daily timeframe below, AON is a stock that has been less affected by the broad weakness seen in September. On 23rd September price reached the $300 round number, however price subsequently pulled back to the 20sma. This was not unexpected given the importance of the round number. Looking ahead, if price can break above this round number and form a continuation pattern, opportunities could develop for Phoenix members in a stock that has trended well in the past.
Cubesmart - CUBE
A stock with an excellent history of performance, price has suffered during the pullbacks in September, however, price remains 34% above the previous year high and trading around the important $50 round number.
On the weekly timeframe, price is trading above the 50sma and 200sma and the Sublime trend filter is green.
On the daily timeframe below, since breaking above the pivot level at $36, price used the 20sma as support. However, September weakness has moved price below the 20sma and 50sma. Price remains above the 200sma. The Sublime trend filter is red. If price can find support at the $50 round number then Phoenix members will be considering pullback and further opportunities in a stock that has been a star performer this year. The next area of resistance is the all-time high at $55 followed by the $100 round number.
Extra Space Storage – EXR
A stock with an excellent history of performance, price has suffered during the pullbacks in September, however, similar to CubeSmart, price remains 34% above the previous year high.
On the weekly timeframe, price continues to trade above the 50sma and 200sma. The Sublime trend filter remains green.
On the daily timeframe below, price this week moved below the 20sma and 50sma. As a result, the Sublime trend filter is red, however, price remains above the 200sma. We now apply patience to see if price can hold at the current level. Phoenix members will continue to be updated with opportunities in this high performing stock.
Microsoft - MSFT
A stock with an impressive trend going back to July 2016! September’s loss of 6.6% snapped a three-month bullish move between June – August which resulted in a gain of 23%. Price remains bullish and we anticipate the long term trend to continue.
On the weekly timeframe, price is trading above the 50sma and 200sma, and the Sublime trend filter continues to be green, confirming the bull trend.
On the daily timeframe below, the Sublime trend filter is red following this week’s retreat of price. Price is below the 20sma and 50sma, but, importantly remains above the 200sma. In terms of the outlook, the next area of resistance is the $300 round number and all-time high at $305.84. A continuation pattern above these levels could offer Phoenix members further opportunities in a stock that has been one of our best performers during 2021.
Tempur Sealy International - TPX
A stock with an interesting past. After this stock initially floated in 2003, price was in a long period of consolidation. A breakout and trend in 2011 were short-lived and price subsequently went into a long period of consolidation. In February 2020 price initially broke out to create an all-time high, however, the pandemic forced price significantly lower. Since creating a new all-time high in November 2020, price has been in an impulsive, bullish trend gaining an incredible 86%.
On the weekly timeframe, price is trading above the 50sma and 200sma and the Sublime trend filter is green.
On the daily timeframe below, since price broke above $40 price has formed a linear trend, using the 20sma as support. This week price has pulled back to the zonal area between the 20sma and 50sma. As price recently failed to clear the $50 round number, this becomes an area of importance. A break and close above this level, followed by a continuation pattern could offer Phoenix members further opportunities in this bullish stock.
Whilst the markets have been broadly weak during September, this was to be expected given the bullish moves in July and August. The economy is showing good signs of recovery and a good number of stocks continue to have record growth. As a result, our Phoenix members will continue to compound and add more positions to their already profitable portfolios.
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Keep it simple. Keep it Sublime.
The ST Team
