Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

TSMC (Taiwan Semiconductor Manufacturing) / Technical Analysis

TSMC (Taiwan Semiconductor Manufacturing)

<ul>
<li>Global equities (MSCI ACWI) continue to hold above $93 on ACWI-US, a level that, since January, we had anticipated would cap upside in 2023. </li>
<li>While ACWI-US remains below $96-$97 (a target we discussed was possible in our April 18, 2023 Int’l Macro Vision), we could easily see $93 act as support moving forward.</li>
<li>Therefore, we are bullish on global equities as long as ACWI-US is above $93, targeting $110.29. This is the measured move price target following the inverse head-and-shoulders breakout.</li>
</ul>


Global equities (MSCI ACWI) continue to hold above $93 on ACWI-US, a level that, since January, we had anticipated would cap upside in 2023. 
While ACWI-US remains below $96-$97 (a target we discussed was possible in our April 18, 2023 Int’l Macro Vision), we could easily see $93 act as support moving forward.
Therefore, we are bullish on global equities as long as ACWI-US is above $93, targeting $110.29. This is the measured move price target following the inverse head-and-shoulders breakout.


MSCI ACWI-US Bullish Above $93; EURO STOXX 50 Holding At Uptrend; Buys in Discretionary, Tech, Svcs.

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

<ul>
<li>The review period for the <a href="https://www.smartkarma.com/entities/nikkei-225" target="_blank" data-smartkarma-citation="entities:22909:1" rel="noopener">Nikkei 225 (NKY INDEX)</a> September rebalance ends end July. We highlight 3 potential inclusions and exclusions for the index.</li>
<li>There are a few alternate adds that are interesting and their inclusion in the index could move things around a fair bit.</li>
<li>Due to the large size difference between the potential adds/deletes, there will be a large funding trade with passive trackers needing to sell over 0.5x ADV on many index constituents.</li>
</ul>


The review period for the Nikkei 225 (NKY INDEX) September rebalance ends end July. We highlight 3 potential inclusions and exclusions for the index.
There are a few alternate adds that are interesting and their inclusion in the index could move things around a fair bit.
Due to the large size difference between the potential adds/deletes, there will be a large funding trade with passive trackers needing to sell over 0.5x ADV on many index constituents.


Nikkei 225 Index Rebalance Preview (Sep 2023): Potential Changes & Dark Horses

<ul>
<li>The review period for the <a href="https://www.smartkarma.com/entities/nikkei-225" target="_blank" data-smartkarma-citation="entities:22909:1" rel="noopener">Nikkei 225 (NKY INDEX)</a> March rebalance ends next week. We highlight the 3 potential inclusions and exclusions for the index.</li>
<li>
<a href="https://www.smartkarma.com/entities/lasertec-corp" target="_blank" data-smartkarma-citation="entities:4126:1" rel="noopener">Lasertec Corp (6920)</a>, <a href="https://www.smartkarma.com/entities/oriental-land-co-ltd" target="_blank" data-smartkarma-citation="entities:13517:1" rel="noopener">Oriental Land (4661)</a> and <a href="https://www.smartkarma.com/entities/renesas-electronics-corp" target="_blank" data-smartkarma-citation="entities:15933:1" rel="noopener">Renesas Electronics (6723)</a> remain our top inclusions, while <a href="https://www.smartkarma.com/entities/toyobo-co-ltd" target="_blank" data-smartkarma-citation="entities:6187:1" rel="noopener">Toyobo Co Ltd (3101)</a>, <a href="https://www.smartkarma.com/entities/nippon-light-metal-holdings" target="_blank" data-smartkarma-citation="entities:1485:1" rel="noopener">Nippon Light Metal (5703)</a> and <a href="https://www.smartkarma.com/entities/toho-zinc-co-ltd" target="_blank" data-smartkarma-citation="entities:2796:1" rel="noopener">Toho Zinc (5707)</a> could be deleted.</li>
<li>Due to the large size difference between the potential adds/deletes, there will be a large funding trade with passive trackers needing to sell over 1x ADV on many index constituents.</li>
</ul>


The review period for the Nikkei 225 (NKY INDEX) March rebalance ends next week. We highlight the 3 potential inclusions and exclusions for the index.

Lasertec Corp (6920), Oriental Land (4661) and Renesas Electronics (6723) remain our top inclusions, while Toyobo Co Ltd (3101), Nippon Light Metal (5703) and Toho Zinc (5707) could be deleted.
Due to the large size difference between the potential adds/deletes, there will be a large funding trade with passive trackers needing to sell over 1x ADV on many index constituents.


Nikkei 225 Index Rebalance Preview (March): Potential Changes as Review Period Nears End

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/dena-co-ltd" target="_blank" data-smartkarma-citation="entities:747:1" rel="noopener">DeNA (2432 JP)</a> announced in June a buyback programme to buy up to ¥15bn of stock over the next nine months. They are two-thirds the way through. </li>
<li>At current pace, they should finish by end-Jan or early Feb, then cancel 8mm shares, leading to a small TOPIX selldown <em>likely</em> in March or April. </li>
<li>The company remains cash and securities rich (net cash, after-tax value of securities, and equity affiliates are 100% of market cap). And growth lines will slowly claw their way positive.</li>
</ul>



DeNA (2432 JP) announced in June a buyback programme to buy up to ¥15bn of stock over the next nine months. They are two-thirds the way through. 
At current pace, they should finish by end-Jan or early Feb, then cancel 8mm shares, leading to a small TOPIX selldown likely in March or April. 
The company remains cash and securities rich (net cash, after-tax value of securities, and equity affiliates are 100% of market cap). And growth lines will slowly claw their way positive.


DeNA (2432) Buyback - Accretive on a Low Leverage Business Which Will Grow In Time

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/nexon-co-ltd" target="_blank" data-smartkarma-citation="entities:16032:1" rel="noopener">Nexon (3659 JP)</a> reported Q2 earnings and Q3 forecasts today. Everything is generally "in-line" to tilting slightly light. But USD/yen volatility matters a lot. </li>
<li>The company announced a small dividend hike, from largely meaningless to ever-so-slightly less meaningless. And a plan to buy back ¥100bn of shares over 3 years. </li>
<li>The inheritance tax issue remains a big one, but overhang appears delayed and buyback accretion is small, and also appears delated. And there's an index sell at end-September.</li>
</ul>



Nexon (3659 JP) reported Q2 earnings and Q3 forecasts today. Everything is generally "in-line" to tilting slightly light. But USD/yen volatility matters a lot. 
The company announced a small dividend hike, from largely meaningless to ever-so-slightly less meaningless. And a plan to buy back ¥100bn of shares over 3 years. 
The inheritance tax issue remains a big one, but overhang appears delayed and buyback accretion is small, and also appears delated. And there's an index sell at end-September.


Nexon Q2 In-Line, New Buyback Plan Too Small To Matter Near-Term

Japan

Konami Holdings Corporation provides digital entertainment, health and fitness and gaming products. The Company develops and sells video games, mobile games and computer games, gaming machines, pachislot and pachinko machines, and fitness machines as well as operates health and fitness clubs.

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Konami Holdings (9766 JP)

MSCI ACWI-US Bullish Above $93; EURO STOXX 50 Holding At Uptrend; Buys in Discretionary, Tech, Svcs.

MSCI $ACWI Bullish Above $93, inverse head-and-shoulders breakout targets $110; EURO $STOXX 50 Holding At the Uptrend; Buys in Consumer...

Vermilion Research

Nikkei 225 Index Rebalance Preview (Sep 2023): Potential Changes & Dark Horses

There could be 3 changes to the NKY in Sep. Lasertec, ZOZO, Nitori could replace MatsuiSec, MitsuiE&S, NipponSheetGlass. There are other stocks...

Brian Freitas

Nikkei 225 Index Rebalance Preview (March): Potential Changes as Review Period Nears End

With a week left in the review period, we revisit the potential NKY changes in March & highlight top add/delete candidates. There will be a large...

Brian Freitas

DeNA (2432) Buyback - Accretive on a Low Leverage Business Which Will Grow In Time

DeNA (2432) is a nice pot of assets with a small business attached. It should be better. It appears to be on its way to getting better. It is very...

Travis Lundy

Nexon Q2 In-Line, New Buyback Plan Too Small To Matter Near-Term

Nexon (3659) earnings are up strongly this year, some improvement, some weak yen. The company announced a new buyback plan for the next 3yrs but it...

Travis Lundy

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