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

The MSCI ACWI and S&amp;P 500 have both achieved a higher high relative to mid-April prices, which we see as a potential early indication of a bullish trend change. Combine this with improving market internals and we are becoming incrementally more bullish. For the MSCI ACWI, one of the more concerning breadth indicators has been the percentage of stocks above their 200-day moving average. This indicator recently hit a higher high (see below, left), a positive development that confirms the market’s recent advance. In today's report we highlight opportunities within global Energy and Technology companies, two of our overweights.

The MSCI ACWI and S&amp;P 500 have both achieved a higher high relative to mid-April prices, which we see as a potential early indication of a bullish trend change. Combine this with improving market internals and we are becoming incrementally more bullish. For the MSCI ACWI, one of the more concerning breadth indicators has been the percentage of stocks above their 200-day moving average. This indicator recently hit a higher high (see below, left), a positive development that confirms the market’s recent advance. In today's report we highlight opportunities within global Energy and Technology companies, two of our overweights. 

Global Energy Shares Breaking Out; Technology Remains Attractive

The U.S. market continues to flash mixed signals, most recently Utilities have shown a big climb in our relative strength rankings. Given mixed signals , our outlook remains neutral and we continue to expect further consolidation and volatility.  In today’s report we highlight concerning groups that illustrate areas of growing deterioration across the market. Concerning groups: TE-04 and TE-05 (Semiconductor Equipment, Large, Mid, and Small-Cap), CD-08 (Home Furnishings), and FN-25 (Asset Management &amp; Custody Banks, Mid-Cap).

The U.S. market continues to flash mixed signals, most recently Utilities have shown a big climb in our relative strength rankings. Given mixed signals , our outlook remains neutral and we continue to expect further consolidation and volatility.  In today’s report we highlight concerning groups that illustrate areas of growing deterioration across the market. Concerning groups: TE-04 and TE-05 (Semiconductor Equipment, Large, Mid, and Small-Cap), CD-08 (Home Furnishings), and FN-25 (Asset Management &amp; Custody Banks, Mid-Cap).

U.S. Equity Strategy: Upgrading Utilities; Downgrading Manufacturing

Founder and Strategist, Entext Economics & Strategy

Sean Maher

Founder and Strategist

Entext Economics & Strategy

Entext provides institutional investors with distinctive, actionable asset allocation and thematic research, which typically challenges the market consensus. Our clients range from credit, equity and multi-asset hedge and pension funds to family offices and sovereign funds. 
 
We focus on identifying key inflection points in macro data and relative asset performance amid the 'groupthink'  and confirmation bias that characterizes most investment bank analysis.

Macro Driven Investment Insight

Thematic (Sector/Industry)

<ul>
<li>TSMC’s weak guidance last week and Q2 shipment downgrades for Apple reflect the ‘peak smartphone’ underweight stance on the Asian supply chain covered last September and since.</li>
<li>Smartphone sales have entered a structural slowdown – chip companies like MediaTek which have diversified revenue exposure into new end markets look more resilient.</li>
<li>The sell-off in semi equipment makers despite strong results reflects fears that the DRAM/NAND capex cycles are also topping out -  NAND prices fell up to 10%…</li>
</ul>


TSMC’s weak guidance last week and Q2 shipment downgrades for Apple reflect the ‘peak smartphone’ underweight stance on the Asian supply chain covered last September and since.
Smartphone sales have entered a structural slowdown – chip companies like MediaTek which have diversified revenue exposure into new end markets look more resilient.
The sell-off in semi equipment makers despite strong results reflects fears that the DRAM/NAND capex cycles are also topping out -  NAND prices fell up to 10%…


‘Peak Smartphone’ Thesis Goes Mainstream, as EM Disappoints Bulls…

Semiconductor & Technology Specialist, Ingenuity

William Keating

Semiconductor & Technology Specialist

Ingenuity

Our focus is exclusively on in-depth research & consulting in the broader semiconductor industry. We focus on the key players, namely Intel, Micron, Qualcomm, Apple, Samsung, NVIDIA, AMD, TSMC & Global Foundries - as well as some of the lesser known, but nonetheless critical, companies such as ASML (for EUV), Mellanox, Cavium, Xilinx etc. We specialise in their products, roadmaps, process technologies, competitive advantages & threats etc. We also help our clients understand the implications of new and emerging technologies, e.g. 3D X-Point, 3D NAND, Carbon Nanotubes, Autonomous Driving, Graphene, Silicon Photonics, Wafer-Level Optics, Artificial Intelligence, FPGA, GPU, ASIC etc. 

Semiconductor Analysis & Research

<a href="https://www.smartkarma.com/entities/21097" target="_blank" data-smartkarma-citation="entities:21097:1" rel="noopener">ASML Holding NV (ASML NA)</a> is the world's leading manufacturer of lithography systems for semiconductor manufacturing. They are the only company in the world that makes the most advanced type of lithography tool known as EUV- and now their sales of those €110 million plus tools are set to double in 2018 and increase by a further 50% in 2019. 
In this Insight, we review the company's latest earnings and accomplishments for 2017 as a whole. We examine their technology leadership in semiconductor lithography and find that there is little chance of any competitor ever catching up with them.

ASML Holding NV (ASML NA) is the world's leading manufacturer of lithography systems for semiconductor manufacturing. They are the only company in the world that makes the most advanced type of lithography tool known as EUV- and now their sales of those €110 million plus tools are set to double in 2018 and increase by a further 50% in 2019. 
In this Insight, we review the company's latest earnings and accomplishments for 2017 as a whole. We examine their technology leadership in semiconductor lithography and find that there is little chance of any competitor ever catching up with them.

Semiconductor Bellwether ASML Reaps The Rewards Of Its Unique EUV Lithography Capability

Asia and Global Semiconductor and Tech Research

Andrew Lu

Equity Bottom-Up

TSMC (Taiwan Semiconductor Manufacturing) / Equity Bottom-Up

TSMC (Taiwan Semiconductor Manufacturing)

<h2>Summary</h2>Despite much in line 1Q18 guidance (8-10% q/q sales decline, 49.5-51.5% gross margin, 38-40% operating margin), most of the incremental new messages from TSMC should drive 18 bull analysts (18 buys and 14 holds) to stay positive on the company and some of 14 bear analysts to change the side. We are positive on lower capex density (although raises sales growth to 10-15% from 5-10% y/y) with room to raise cash dividends to NT$10 per share within the next few years. We are positive on much…

SummaryDespite much in line 1Q18 guidance (8-10% q/q sales decline, 49.5-51.5% gross margin, 38-40% operating margin), most of the incremental new messages from TSMC should drive 18 bull analysts (18 buys and 14 holds) to stay positive on the company and some of 14 bear analysts to change the side. We are positive on lower capex density (although raises sales growth to 10-15% from 5-10% y/y) with room to raise cash dividends to NT$10 per share within the next few years. We are positive on much…

TSMC Expects Stronger Sales but Lower Capex Density, Implying Room to Raise Cash Dividends

Netherlands

ASML Holding N.V. develops, produces, and markets semiconductor manufacturing equipment, specifically machines for the production of chips through lithography. The Company services clients world wide.

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ASML Holding NV (ASML NA)

Global Energy Shares Breaking Out; Technology Remains Attractive

The MSCI ACWI and S&P 500 have both achieved a higher high relative to mid-April prices, which we see as a potential early indication of a...

Vermilion Research

U.S. Equity Strategy: Upgrading Utilities; Downgrading Manufacturing

The U.S. market continues to flash mixed signals, most recently Utilities have shown a big climb in our relative strength rankings. Given mixed...

Vermilion Research

‘Peak Smartphone’ Thesis Goes Mainstream, as EM Disappoints Bulls…

TSMC’s weak guidance last week and Q2 shipment downgrades for Apple reflect the ‘peak smartphone’ underweight stance on the Asian supply chain...

Sean Maher

Semiconductor Bellwether ASML Reaps The Rewards Of Its Unique EUV Lithography Capability

ASML Holding NV (ASML NA) is the world's leading manufacturer of lithography systems for semiconductor manufacturing. They are the only company in...

William Keating

TSMC Expects Stronger Sales but Lower Capex Density, Implying Room to Raise Cash Dividends

SummaryDespite much in line 1Q18 guidance (8-10% q/q sales decline, 49.5-51.5% gross margin, 38-40% operating margin), most of the incremental new...

Andrew Lu

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