Welcome to our weekly newsletter, where we offer insights into stock setups that we share with our Phoenix members.
During the first week of January, we saw the markets pull back sharply following a strong finish to 2021. This week the markets have rebounded from levels of support, once again demonstrating the markets continue to breathe within an expected range. Notably, the markets also experienced a similar pullback in January last year.
The patience we have applied during this recent, anticipated pullback, has enabled our Phoenix community to continue holding long-term, profitable positions.
Successful trading is a game of discipline and patience. We expect our patience will be rewarded, as it repeatedly has been in the past, with new opportunities along with compounding existing positions.
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 2.4% gain to date. 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, and these moving averages are diverging, 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 returned between October to December, with total gains of 24%. Price in January has pulled back by 7.2% 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 price has pulled back to the weekly pivot level at £15.88.
On the daily time frame below, as mentioned above, the pullback this week has reached a moderately-important pivot level (we educate our members about pivot levels in our training). As a result the Sublime trend filter this week changed to grey from 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.
Safestore Holdings - SAFE
A stock with a long-term trend dating back to January 2014. More recently, since price broke above a key pivot level at £8.87 in May last year, price has gained 50%. Price in January has pulled back, with a decline of 5.8% to date.
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, the Sublime trend filter this week switched to grey from green, indicating weakness. Price is below the 20 SMA and at the 50 SMA. Price remains above the 200 SMA. With earnings this week, we will wait to assess how price responds, and 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 with a gain of 8.7% initially continued in January resulting in an all-time high at £17.43, however price has subsequently weakened.
On the weekly time frame, price is above the 50 and 200 SMA, and the Sublime trend filter is green. Last week price attempted to close above a key pivot level at £16.97, but failed, and that weakness has continued into this week.
On the daily time frame below, this week price has weakened to the 50 SMA. Price is trading above the 200 SMA, and the Sublime trend filter is green. At this stage we anticipate the 50 SMA 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.
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S&P 500
The year has started with initial weakness in the S&P 500: January is displaying a decline to date of 1.5%. As mentioned in the opening statement of the newsletter, January is often a weak month for the S&P 500, particularly following strength into the end of the previous calendar year.
On the weekly time frame, price continues to trade above the 50 and 200 SMA, and the Sublime trend filter remains green. Following last week’s large bearish candle, this week is displaying an indecision candle.
On the daily time frame below, price made a new all-time high at 4820 on 4 January, before price retreated 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 500 and, as a result, we continue to look for stocks that are outperforming the index.
US STOCKS
AmerosourceBergen - 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 has continued into January with a further 2.0% gain to date. Price created a new all-time high on 11 January at $137.
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, the Sublime trend filter is green, with price trading above the 20, 50 and 200 SMA. Price recently broke out above a pivot zone at $129 – $130, before retesting the level. 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.
Ameriprise – AMP
Price was in a strong trend between November 2020 and April last year, gaining some 60%. Price subsequently went into a period of consolidation until October where it broke out and has since been in a strong trend, gaining 23%. This week price created an all-time high at $332.
On the weekly time frame, price continues to trade above the 50 and 200 SMA. The Sublime trend filter remains green.
On the daily time frame below, price is currently trading above the 20, 50 and 200 SMA. The Sublime trend filter is green. Price is currently in a strong trend and members of our Phoenix community have multiple positions in this asset. The next area of resistance is the $400 round number. We will continue to update our Phoenix community members on further opportunities.
Berkshire Hathaway - BRK.B
A stock with a history of trends lasting 1-2 years. We discussed this stock last week and in 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 this week at $323.
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.
Brown & Brown - BRO
BRO is the stock that our Phoenix community has been trading since price broke above the $50 round number and previous year high in July this year. On the monthly time, price is currently displaying a minor pullback with a decline of 1.8%, which is not unexpected given the bullish moves in recent months.
On the weekly time frame, price is trading above both the 50 and 200 SMA, and a Sublime trend filter is green.
On the daily time frame below, price is trading above the 50 and 200 SMA and recently has been using the zonal area between the 20 and 50 SMA as support. The Sublime trend filter is currently green. This stock has earnings to be released on 24 January. The next area of resistance is the $100 round number. With a pattern of long-term trends, BRO is a stock that is high on our Phoenix community watchlist and we will continue to provide updates as new trends emerge.
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. January is currently displaying an indecision candle.
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 this week switched to grey from green, indicating weakness. 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.
McKesson - MCK
A stock with an interesting mix of strong trends and periods of consolidation. Between November 2012 to June 2015 price was in a very strong trend, gaining 150%. More recently, since price broke above the monthly pivot at $179 in March last year, price has also shown strength, with a gain to date of 42%.
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, the Sublime trend filter is green, with price trading comfortably above the 20, 50 and 200 SMA. In the past two weeks price has closed above both the previous all-time high set in May 2015 and the $250 minor round number. A continuation pattern above the current level could offer Phoenix members an opportunity in a stock with a history of strong trends. The next area of resistance is the $300 round number.
Charles Schwab - SCHW
A stock with a mixed history of trends and pullbacks. Since the pandemic price has been in a strong trend, with a gain of nearly 200%. This year has started particularly bullish, with a gain to date of 11.5% and a new all-time high at $95.
On the weekly time frame, the Sublime trend filter is green, and price is trading above the 50 and 200 SMA.
On the daily time frame below, price is trading above the 20, 50 and 200 SMA, and the Sublime trend filter is also green. Since price retested a minor pivot level at $84 on 31 December, price has made an impulsive move higher, gaining 11%. This stock is faced with two immediate events – the significant $100 round number and earnings on 18 January. We will assess price action following these events, and subsequently, share updates with our Phoenix community.
This week the markets have bounced following pullbacks 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.
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Keep it simple. Keep it Sublime.
The ST Team
