Welcome to our weekly newsletter, where we offer insights into stock setups that we share with our Phoenix members.
This week we have seen the markets pause, which is to be expected, as we are in the middle of the US earnings season.
One of the many benefits of trend trading is that skills such as patience allow us to wait on price, which we consider to be the most important indicator.
In last week’s newsletter, we discussed the possibility of a ‘Santa Claus’ rally into the end of the year – as we have seen many times over the years. Our view remains that, considering where the indices are currently positioned, the probability of this occurring is high, and we await price to dictate our next move.
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, during October price provided long-awaited bullishness, completing the month with a gain of 2.1%. As we have discussed for several months, price has struggled to close above the pivot high from 2015 at 7124. In November the momentum in price is continuing, with a gain to date of 2%.
On the weekly time frame, the Sublime trend filter is green, and price is trading above the 50sma and 200sma.
On the daily time frame below, price has continued to trade above all moving averages; 20sma, 50sma and 200sma. The Sublime trend filter this week has maintained green, a continued sign strength is building. Our overall bias remains bullish, and we continue to look for stocks outperforming the Index.
UK STOCKS
3I Infrastructure – 3IN
On the monthly time frame, price is bullish overall, with a long-term trend since 2011. Price created an all-time high in February 2020. Price then suffered a 43% drop due to the covid pandemic, which was then followed by a long period of consolidation. In October price finally broke above the previous all-time high with a gain in the month of 8.9%. In November price has continued its rise.
On the weekly time frame, price is trading above the 50sma and 200sma and the Sublime trend filter is green. Price has been in consolidation for 623 days, including a fake break out in August this year. One of the Sublime trading principles is the longer the period of consolidation the bigger the breakout.
On the daily time frame below, the Sublime trend filter is green, and price is trading above the 20sma, 50sma and 200sma. As mentioned, in August price created a fake breakout, and subsequently retreated to the 200sma. Since then, price has been in an uptrend, creating higher highs and higher lows. Now that price has broken through a strong level of resistance, Phoenix members will have this stock on their watchlist. The next level of resistance is the £4 round number.
Ashtead Group - AHT
A trending stock we have repeatedly discussed in this newsletter and with our Phoenix community. Price was bullish in October with a gain of 8.5%. To date, November has continued the momentum, with price creating a new all-time high this week at £64.26.
The Sublime trend filter is green on the weekly time frame, and price remains above the 50sma and 200sma.
On the daily time frame below, the Sublime trend filter is also green, and price is above the 20sma, 50sma and 200sma. The strength discussed in previous weeks is continuing, with the 20sma diverging from the 50sma. Price this week has wrestled with the previous pivot high. A break and close above this level could offer Phoenix members further opportunities. The next area of resistance is the £100 major round number.
Scottish Mortgage Investment Trust – SMT
This stock has an attractive history of bullish, long-term trends, however, has also experienced periods of short, impulsive pullbacks. Price created an all-time high in February this year, however, price pulled back sharply to retest the £10 round number. Price subsequently moved higher, however, a linear trend has yet to form. Price was bullish in October with a gain of over 5%, however, November is currently displaying an indecision candle.
On the weekly time frame, price is trading above the 50sma and 200sma, and the Sublime trend filter is green.
On the daily time frame below, the Sublime trend filter is green, and price is trading above the 20sma, 50sma and 200sma. Since breaking out from the previous pivot high, price has been bullish, however this week has pulled back to retest the 20sma. A continuation pattern above the current all-time high could offer Phoenix members an opportunity in a stock that has trended well in the past. The next area of resistance is the £20 round number.
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S&P 500
Following September’s seasonal decline, in October the bulls took back control with a gain of 7.0%. In November the momentum slowed, but this was to be expected with earnings season underway. To date, price has gained in the month by 1.0%.
On the weekly time frame, price continues to trade above the 50sma and 200sma, and the Sublime trend filter remains green.
On the daily time frame below, this week price has pulled back modestly from last week’s all-time high at 4685. The Sublime trend filter remains green, and price is trading above all 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
Applied Materials - AMAT
Applied Materials is a stock that has demonstrated periods of strong trends. Price was particularly bullish between 2016 – 2018, and again during 2021. During November price has been particularly bullish with a gain to date of 12.6% and an all-time high at $157.
On the weekly time frame, price is trading above the 50sma and 200sma, and the Sublime trend filter is green. Last week price was particularly bullish with a large break out candle above a key pivot level, along with a close above the $150 round number.
On the daily time frame below, price is trading above the 20sma, 50sma and 200sma, and the Sublime trend filter is green. This week 20sma crossed above the 50sma, the golden cross. As a result, all moving averages are aligned on all time frames. Due to a long period of consolidation, some 220 days, we will monitor this stock to see if a continuation pattern can form above the current all-time high and $150 round number. We will update our Phoenix community members further as price evolves.
Blackstone Inc. - BX
Blackstone is a stock that we have discussed in the Phoenix community throughout 2021. Price has been particularly bullish since closing above the previous year high at $67, with a gain of over 120%. October was a particularly bullish month with a gain of 19%, and price continues to move higher during November.
On a weekly time frame, the Sublime trend filter is green, and price is trading above the 50sma and 200sma.
On the daily time frame below, price is also trading above all moving averages; 20sma, 50sma and 200sma. The Sublime trend filter is green. Price this week created a new all-time high, however, price has yet to form a linear trend. The next area of resistance is the $150 round number. A continuation pattern above this level will be of interest to Phoenix members, who will be looking for a compound position to add to existing profits.
Calix - CALX
This is a stock that has been in an extremely bullish trend since price broke out from a long period of consolidation in May 2020. Since then, price has increased by an incredible 533%. October and November have been particularly bullish months with gains of 27% and 17% respectively.
On the weekly time frame, the Sublime trend filter is green, and price is trading above the 50sma and 200sma.
On the daily time frame below, following the breakout in late September, price subsequently pulled back to retest the 20sma before again breaking higher, with a further re-test of the 20sma and price has again continued higher. The Sublime trend filter is green. Price is trading above the 20sma 50sma and 200sma, and the moving averages are consistently angling up, indicating a linear trend is underway. The next area of resistance is the $100 round number. We will monitor this stock and update our Phoenix community on any training opportunities.
Cadence Design Systems - CDNS
Cadence Design Systems is a stock that has been in the Phoenix portfolio for well over a year and we have been trading this for a great success. On the monthly time frame, price has been in an uptrend since 2012. Price suffered during the pandemic but since April 2020 has been in a strong uptrend including a gain in October of over 14%.
On the weekly time frame, price is trading above the 50sma and 200sma, and the Sublime trend filter is green.
On the daily time frame below, during September price retreated to an important pivot level at $150, and has subsequently moved higher, creating an all-time high this week at $183. 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. We will continue to update our Phoenix community members with opportunities in this high performing stock.
Sherwin-Williams Company - SHW
This is a stock that has been in a long-term trend since 2011, however, price has experienced both periods of consolidation and sharp pullbacks along the way. It’s currently showing bullish momentum with a gain in October of 13%, and which has been followed up with further gains in November.
On the weekly time frame, price is trading above the 50sma and 200sma, and the Sublime trend filter is green.
On the daily time frame below, weakness in price in September resulted in a pullback to the zonal area around the 200sma. However, price subsequently regained strength and moved higher. Price broke above a key pivot level on 26 October, before retesting the same pivot level – which was anticipated. Price subsequently used this level as support and moved higher, again creating an all-time high this week at $326. The Sublime trend filter is green and price is trading above the 20sma, 50sma and 200sma. The next area of resistance is the $400 round number. Phoenix members will be monitoring his stock to see if a linear trend can develop, as was the case between 2012 – 2014.
Synopsys - SNPS
Synopsis is a similar stock to SHW, where price has risen dramatically since 2012, however, there have been periods of sharp pullbacks along the way. In September price pulled back 15% to the zonal area around the $300 round number which coincided with a key pivot level. However, in October, the bulls came in and fully reversed the decline, resulting this week in an all-time high.
On the weekly time frame, the Sublime trend filter is green and price is trading above the 50sma and 200sma.
On the daily time frame below, this week the 20sma crossed above the 50sma – as a result, all moving averages are aligned on all time frames. The Sublime trend filter is green, and price is above the 20sma, 50sma and 200sma. This stock has a history of trending for months and in some cases years; Phoenix members will monitor it closely to see if a linear trend can develop above the current all-time high. The next area resistance is the $400 round number.
Zoetis - ZTS
Zoetis is the final stock in today’s newsletter. It is a relatively new stock; it was listed in 2013 and has been in an uptrend since 2017. However, to date, the trend has not been the cleanest, and we await to see if a linear trend can form.
On the weekly time frame, price is trading above the 50sma and 200sma and the Sublime trend filter is green.
On the daily time frame below, price is trading above the 20sma, 50sma and 200sma, and the Sublime trend filter is green. During July and August price failed to convincingly break out above the $200 round number and during September subsequently retreated. However, during October the bulls have stepped in and regained control, resulting in price an all-time high at $221. The Sublime trend filter is green, and price is trading above the 20sma, 50sma and 200sma. The next level of resistance is the,$300 round number. We will monitor the stock to assess whether a linear trend can develop, and update our Phoenix community accordingly.
This week the markets have continued to reward our patience with breakouts, particularly in the FTSE. 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
