Welcome to our weekly newsletter, where we offer insights into stock setups that we share with our Phoenix members.
The summer months are typically a period of consolidation for the indices, with many institutions and traders taking holidays. However, this year the markets are showing no signs of slowing down. This week we have seen new all-time highs in the Dow and S&P, whilst the Nasdaq is very near to its all-time high. This week the FTSE reached its highest intraday level since February 2020.
As we have repeatedly discussed over the past several months, the markets continue to show continued strength, with new highs and modest pullbacks to areas of support. These favourable technical trading patterns give us confidence in the current momentum continuing.
Looking deeper into the main indices:
- The S&P 500, following last week’s tag of the 20sma, this week price broke higher, creating an all-time high of 4,462.
- The Nasdaq 100, momentum paused this week and price tagged the 20sma before moving higher. Price remains just below the all-time high of 15,186.
- The Dow Jones 30, momentum of recent weeks continued with a breakout and new all-time high of 35,530.
- The FTSE 100, last week’s strength continued into this week, with an 18-month high of 7,221.
The overall trend in the main indices remains bullish, and the probability remains weighted towards the continuation of the long-term bull trends established in 2009.
We continue to hold high-performing stocks in our portfolio, which we have been adding to during this round of breakouts. Good quality opportunities continue to present themselves, which allows us to diversify further. We continue to share setups and signals with our Phoenix members.
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
For the past three months price has struggled to break above the pivot high from 2015 at 7,124. However over the past two weeks strength has returned to the FTSE, and price has been able to close above the 20sma and 50sma, along with the pivot high from 2015. This week price reached 7,221, an 18-month high. The patience we have applied during this time should reward us with opportunities in stocks that break out from long periods of consolidation.
The Sublime trend filter continues to remain green on the weekly timeframe, with price this week trading above both the 50sma and 200sma.
On the daily timeframe below, we can see that price closed above the 20sma and 50sma, before pausing, and then moving higher this week. Price is now clear of the moving averages and 7,000 round number. This week the Sublime trend filter turned green. Our bias overall remains bullish, and we continue to look for stocks outperforming the Index.
UK STOCKS
Admiral Group - ADM
Overall price is looking strong, however historically price action has been mixed. Since price broke above the pivot high from April 2018 at £23 price has been in a broad uptrend. Whilst more recently, since June price has made an impulsive move, gaining 24%.
On the weekly timeframe, price is trading above the 50sma and 200sma, and the Sublime trend filter is green.
On the daily timeframe below, the Sublime trend filter is green and price is above the 20sma, 50sma and 200sma. Price was in a period of consolidation between March to mid-July 2021, and has since broken out and formed a linear pattern. A continuation of this move could offer Phoenix members an opportunity before the next level of resistance, being the £50 round number.
Greggs - GRG
Price is currently in a linear trend with 10 consecutive months of gains. August has been a particularly bullish month with a 7.5% gain to date. Price is currently faced with resistance at the £30 round number.
On the weekly timeframe, the Sublime trend filter is green, and price is trading above the 50sma and 200sma.
On the daily timeframe below, price is above the 20sma, 50sma and 200sma, and the Sublime trend filter is green. Since July 2019 price made several attempts to clear strong resistance at £25. However, since breaking out from this level in June this year, price has gone on to create a new all-time high. The next area of resistance is the £30 round number, followed by the £50 round number. We will continue to update the Phoenix community of opportunities in this bullish stock.
Rightmove - RMV
A stock with a history of trends but with mixed performance in recent years. Between 2010 and 2014 price was in a linear trend. However since then price has moved higher, but with deep pullbacks along the way. In August price reached a new all-time high at £7.34, however price has since pulled back to test the £7 level.
On the weekly timeframe, price is trading above the 50sma and 200sma, and the Sublime trend filter is green.
On the daily timeframe below, the Sublime trend filter is green and price is above the 20sma, 50sma and 200sma. Price has been in a period of consolidation since October 2020, until the recent break out. We now need to see price find support at either the pivot high or 20sma. A continuation pattern above the recent high could offer Phoenix members an opportunity before the next level of resistance, being the £10 round number.
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S&P 500
Following last week’s subdued price action, this week the momentum returned to the S&P, resulting in price creating a new all-time high of 4,462. Whilst the monthly gains are modest, August is on track to record the seventh consecutive month of gains.
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, price is above the 20sma, 50sma and 200sma, and the Sublime trend filter is green. The bulls remain in firm control of the S&P, and we continue to look for stocks that are outperforming the index.
US STOCKS
Automatic Data Processing - ADP
A stock we discussed last week. This stock has a good history of trends, but also experienced periods of consolidation. In terms of recent price action, July closed with an impressive 5.5% gain, whilst August to date price has gained some 2.5%.
On the weekly timeframe, price is trading above both the 50sma and 200sma, and the Sublime trend filter remains green.
On the daily timeframe below, price is trading above the 20sma, 50sma and 200sma, and the Sublime trend filter is also green. Since price broke above the major pivot level at $182 price has been using the zonal area between the 20sma and 50sma as support. Price is now showing signs of developing a linear trend. The next area of resistance is the $300 round number. We will apply patience to assess how the trend develops and update our Phoenix community with any high probability trading opportunities.
Aptiv - APTV
Price is bullish overall. A good trend was in place between 2012 and 2015, and since the pandemic price has rebounded, gaining some 280%. Price has recently been volatile. A strong close in July hasn’t followed through into August, which is currently displaying an indecision candle.
On the weekly timeframe, price is trading above the 50sma and 200sma, and the Sublime trend filter is green.
On the daily timeframe below, the Sublime trend filter is green and price is above the 20sma, 50sma and 200sma. Since February 2021 price has been in a period of consolidation. Following the recent breakout, price has pulled back to retest a previous level of resistance. Should this level hold and resistance become support, then we could see a linear trend develop. A continuation pattern above the recent high of $170 could offer Phoenix members an opportunity before the next level of resistance, being the $200 round number.
Capital One Financial - COF
This stock is currently in a bullish trend. This stock floated in 1995 and until early 2021 struggled to find direction and momentum. However, since the breakout in February 2021 price has formed a bullish, impulsive trend.
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 broke above the $150 round number before pulling back to retest it, resulting in a period of consolidation between 4 June and 10 August this year. Price has now broken out and price is trading above the 20sma, 50sma and 200sma, and the Sublime trend filter is green. The next area of resistance is the $200 round number. We will update Phoenix members with any opportunities in this stock.
Discover Financial Services - DFS
Following the pandemic price rebounded strongly, gaining some 317% since April 2020. A good trend was in place between October 2010 to December 2014. Price has recently been mixed, with periods of short-lived trends followed by deep pullbacks. To date August is showing strength with an 8% gain.
On the weekly timeframe, price is trading above the 50sma and 200sma, and the Sublime trend filter is green.
On the daily timeframe below, the Sublime trend filter is green and price is above the 20sma, 50sma and 200sma. Between 10 June and 6 August this year, price was in a period of consolidation. Price has since broken higher. The next area of resistance is the $150 round number. A continuation pattern above this level could offer Phoenix members an opportunity before the next level of resistance, being the $200 round number.
Dover - DOV
Price is looking strong overall with bullish movements in July, with a gain of 11%, and August with a gain to date of 3%.
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 the previous year high at $127 price initially struggled to build momentum, in turn re-testing resistance turned support on several occasions. Since then a trend has developed. The Sublime trend filter is green and price is trading above the 20sma, 50sma and 200sma. The next area of resistance is the $200 round number. Phoenix members have a position in this stock and we will communicate any compounding positions should the opportunities arise. 
Eaton - ETN
A stock with a mixed history, however, since breaking above $100 this stock has been in a strong trend. July’s impressive performance with a gain of 6.7% has been followed up in August, with a gain to date of 5.8%.
On the weekly timeframe, price is trading above the 50sma and 200sma, and the Sublime trend filter is green.
On the daily timeframe below, the Sublime trend filter is green and price is trading above the 20sma, 50sma and 200sma. Since price broke above the $100 round number and previous resistance, price has used both the 20sma and 50sma as support. Price has recently been in an impulsive uptrend. The next area of resistance is the $200 round number. We will communicate to our Phoenix members any positions should the opportunities arise.
Microsoft - MSFT
Following an indecisive month in May, June and July produced bullish candles with gains of 8.5% and 5.2% respectively. This momentum has slowed in August, with a modest 1.7% gain. Year to date price has increased by an incredible 30% to reach its all-time high level at $292.
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 green, and price is above the 20sma, 50sma and 200sma. Following on from the previous commentary, the MAs are now all aligned and we expect to see strength continue. The next area of resistance is the $300 round number. In the past, we have generated excellent profits from this stock, and we will continue to share breakout and pullback signals with our Phoenix members as the trend further develops.
Another week of new all-time highs in the Dow and S&P, along with an 18-month high in the FTSE. A good number of stocks continue to have record growth allowing our Phoenix members to compound and add more positions to the already profitable ones.
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Keep it simple. Keep it Sublime.
The ST Team
