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

iShares MSCI ACWI ETF / Technical Analysis

<ul>
<li>In our latest int'l reports we have preached caution, and since January we have discussed our expectations for $93 to cap upside on the ACWI-US</li>
<li>Thus far, $93 has proven to be rock-solid resistance, and ACWI-US now displays a 4.5-month uptrend violation signaling the pullback has officially begun.</li>
<li>We would expect this pullback to continue down to $86-87 at minimum, and potentially $84 (December 2022 low). Even $75-77 (the 2022 lows) is not out of the question.</li>
</ul>


In our latest int'l reports we have preached caution, and since January we have discussed our expectations for $93 to cap upside on the ACWI-US
Thus far, $93 has proven to be rock-solid resistance, and ACWI-US now displays a 4.5-month uptrend violation signaling the pullback has officially begun.
We would expect this pullback to continue down to $86-87 at minimum, and potentially $84 (December 2022 low). Even $75-77 (the 2022 lows) is not out of the question.


MSCI ACWI Uptrend Break; Defensives to Shine; Ideas in Staples, Health Care, Telecomm, Utilities

Petroleo Brasileiro  / Technical Analysis

<ul>
<li>Our neutral outlook has come down to price supports holding on the broad global indexes, including $54 on MSCI ACWIex-US (ACWX-US), $76.50 on EAFE (EFA-US), and $99 on ACWI (ACWI-US).</li>
<li>These support levels are now breaking which tilts our stance to bearish at the index level as long as the aforementioned indexes remain below their previous support levels.</li>
<li>We still see the EURO STOXX 50 and TOPIX as holding above support, while the Hang Seng and Bovespa appear to be bottoming, none of which paint a bearish picture.</li>
</ul>


Our neutral outlook has come down to price supports holding on the broad global indexes, including $54 on MSCI ACWIex-US (ACWX-US), $76.50 on EAFE (EFA-US), and $99 on ACWI (ACWI-US).
These support levels are now breaking which tilts our stance to bearish at the index level as long as the aforementioned indexes remain below their previous support levels.
We still see the EURO STOXX 50 and TOPIX as holding above support, while the Hang Seng and Bovespa appear to be bottoming, none of which paint a bearish picture.


Broad Indexes Violate Support But Bright Spots Remain; Buying Energy, Staples, and Utilities

Our neutral and cautious outlook continues to be reinforced by market dynamics that have generally deteriorated over the past week. RS improvement for defensives (Utilities, Staples, Real Estate, and Health Care) continues to make these Sectors attractive. Meanwhile, not one MSCI ACWI Sector is breaking down, and important price support levels are holding in the US, Europe, and Japan. Until supports start to break we cannot be bearish, though we would not be surprised to see ~5% downside with potential for more.

Our neutral and cautious outlook continues to be reinforced by market dynamics that have generally deteriorated over the past week. RS improvement for defensives (Utilities, Staples, Real Estate, and Health Care) continues to make these Sectors attractive. Meanwhile, not one MSCI ACWI Sector is breaking down, and important price support levels are holding in the US, Europe, and Japan. Until supports start to break we cannot be bearish, though we would not be surprised to see ~5% downside with potential for more.

Crude Oil and Copper Breakdowns Reinforce Our Concerns; Defensive Sectors Remain Attractive

Alpha-Centric ESG Research

Kyle Rudden

In a recent Insight, <a href="https://www.smartkarma.com/insights/climate-pledges-promise-and-potential-for-planet-and-profit-but-the-devil-is-in-the-details" target="_blank" data-smartkarma-citation="insights:50690" rel="noopener">Climate Pledges: Promise and Potential for Planet and Profit... But the Devil Is in the Details</a>, I addressed the recent spate of net-zero climate pledges from the proverbial 50,000 foot level. Why a healthy dose of skepticism is justified, what to look for in scrutinizing corporate climate pledges, and why you should. It was heavy on theory, background, definitions, etc.More recently, I published an Insight that zoomed in on the subject. Still at altitude, but not 50,000 feet. In that Insight, <a href="https://www.smartkarma.com/insights/climate-pledges-singapore-and-japan-lead-apac-issuers-in-quality-of-climate-pledges" target="_blank" data-smartkarma-citation="insights:50701" rel="noopener">Climate Pledges: Singapore and Japan Lead APAC Issuers in Quality of Climate Pledges</a>, I assessed and bechmarked climate pledges by Asia Pacific companies. Whilst it is a stand-alone analysis, it also provides perspective for deeper company-specific analyses and reports.In the context corporate climate action, the Asia Pacific region is uniquely interesting especially in terms of relative activity. But APAC is still eclipsed by Europe and North America in absolute totals, and some of the upcoming company-specific analyses will invariably cover some big European and U.S. names. Oil supermajors, big technology. Both climate cretins, and climate leaders.Like the aforementioned Asia Pacific report, this Insight is takes a closer look at climate pledges by European issuers (by domicile and primary listing). It analyses specific issuers, albeit largely from a regional and sectoral perspective. A sort of triaging of large swatches of issuers, in part to identify candidates for deeper-dives. Similar to the APAC report in purpose, but a very different universe.

In a recent Insight, Climate Pledges: Promise and Potential for Planet and Profit... But the Devil Is in the Details, I addressed the recent spate of net-zero climate pledges from the proverbial 50,000 foot level. Why a healthy dose of skepticism is justified, what to look for in scrutinizing corporate climate pledges, and why you should. It was heavy on theory, background, definitions, etc.More recently, I published an Insight that zoomed in on the subject. Still at altitude, but not 50,000 feet. In that Insight, Climate Pledges: Singapore and Japan Lead APAC Issuers in Quality of Climate Pledges, I assessed and bechmarked climate pledges by Asia Pacific companies. Whilst it is a stand-alone analysis, it also provides perspective for deeper company-specific analyses and reports.In the context corporate climate action, the Asia Pacific region is uniquely interesting especially in terms of relative activity. But APAC is still eclipsed by Europe and North America in absolute totals, and some of the upcoming company-specific analyses will invariably cover some big European and U.S. names. Oil supermajors, big technology. Both climate cretins, and climate leaders.Like the aforementioned Asia Pacific report, this Insight is takes a closer look at climate pledges by European issuers (by domicile and primary listing). It analyses specific issuers, albeit largely from a regional and sectoral perspective. A sort of triaging of large swatches of issuers, in part to identify candidates for deeper-dives. Similar to the APAC report in purpose, but a very different universe.

Climate Pledges By Utilities Are Among the Best in Europe

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Today, the Victorian government rejected a A$250mn 300-metre floating gas terminal proposal at Mornington Peninsula. Planning Minister Richard Wynne said the Crib Point terminal would have had "<a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02358799-2A1289920?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">unacceptable environmental effects</a>" in Western Port.
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/198/047/original/image_90576892521617071507869.png?1617071510" class="editor-image img-responsive" data-smartkarma-image-id="198047"></figure>
<div class="content-caption">Source: ABC. A protester in a wetsuit taking his concerns about the terminal to the Victorian Parliament in early March</div>
<a href="https://www.smartkarma.com/entities/agl-energy-ltd" target="_blank" data-smartkarma-citation="entities:554:1" rel="noopener">AGL Energy Ltd (AGL AU)</a>, which has already outlayed millions of dollars on the Crib Point project, <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02358799-2A1289920?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announced</a> it was “considering its position” on the minister’s decision.
Concurrent with this rejection, AGL <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02358644-2A1289840?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announced</a> it was splitting into two separate companies: a thermal coal generation business and a separate zero-carbon energy retailer. 
The split follows a raft of new initiatives/developments recently including an <a href="https://www.agl.com.au/about-agl/media-centre/asx-and-media-releases/2021/january/agl-announces-suppliers-for-grid-scale-battery-plans" target="_blank" rel="noopener">agreement</a> with suppliers for grid-scale battery plans, the <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02355442-2A1288076?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">renewal</a> of the Portland smelter contract, and the <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02353382-2A1286980?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">participation</a> in PowAR's acquisition of <a href="https://www.smartkarma.com/entities/tilt-renewables-ltd" target="_blank" data-smartkarma-citation="entities:24371:1" rel="noopener">Tilt Renewables Ltd (TLT NZ)</a> (<a href="https://skr.ma/i5ugg" target="_blank" rel="noopener">Tilt Renewables: Mercury/PowAr's Big Blow</a>).
Speculation of a demerger has been running hot since Australia's oldest energy unity grappled with softening power prices, and a <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02340133-2A1279818?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">A$2.29bn</a> loss in the 1H21, exacerbated by A$2.7bn in <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02337704-2A1278422?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">impairment charges</a>. 
The share price reaction to the split was largely muted. 
As always, more below the fold.

Today, the Victorian government rejected a A$250mn 300-metre floating gas terminal proposal at Mornington Peninsula. Planning Minister Richard Wynne said the Crib Point terminal would have had "unacceptable environmental effects" in Western Port.

Source: ABC. A protester in a wetsuit taking his concerns about the terminal to the Victorian Parliament in early March
AGL Energy Ltd (AGL AU), which has already outlayed millions of dollars on the Crib Point project, announced it was “considering its position” on the minister’s decision.
Concurrent with this rejection, AGL announced it was splitting into two separate companies: a thermal coal generation business and a separate zero-carbon energy retailer. 
The split follows a raft of new initiatives/developments recently including an agreement with suppliers for grid-scale battery plans, the renewal of the Portland smelter contract, and the participation in PowAR's acquisition of Tilt Renewables Ltd (TLT NZ) (Tilt Renewables: Mercury/PowAr's Big Blow).
Speculation of a demerger has been running hot since Australia's oldest energy unity grappled with softening power prices, and a A$2.29bn loss in the 1H21, exacerbated by A$2.7bn in impairment charges. 
The share price reaction to the split was largely muted. 
As always, more below the fold.

AGL Energy (AGL AU): Carbon/Zero-Carbon Split

Germany

E.ON is one of Europe's largest operators of energy networks and energy infrastructure and a provider of innovative customer solutions for some 51 million customers. The company's operations are energy networks and customer solutions.

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E.ON (EOAN GR)

MSCI ACWI Uptrend Break; Defensives to Shine; Ideas in Staples, Health Care, Telecomm, Utilities

$93 on $ACWI has proven to be rock-solid resistance, and it now displays a 4.5-month uptrend violation signaling the pullback has officially begun....

Vermilion Research

Broad Indexes Violate Support But Bright Spots Remain; Buying Energy, Staples, and Utilities

We are highlighting Energy again because it is easily our favorite Sector. Additionally, defensive Sectors including Staples and Utilities display...

Vermilion Research

Crude Oil and Copper Breakdowns Reinforce Our Concerns; Defensive Sectors Remain Attractive

Our cautious outlook is reinforced by ongoing developments. Relative strength improvement for defensives (Utilities, Staples, Real Estate, Health...

Vermilion Research

Climate Pledges By Utilities Are Among the Best in Europe

Corporate climate pledges by European companies eclipse all other regions of the world, and with some interesting differences such as which sectors...

Kyle Rudden

AGL Energy (AGL AU): Carbon/Zero-Carbon Split

The demerger announcement provides shareholders with a carbon exposure choice. Arguably, the split should be positive for forward growth for both...

David Blennerhassett

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