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

Continued encouraging COVID-19 news and accommodative moves by the Fed have allowed the bulls to remain in control while short-term support on the S&amp;P 500 held near 2,450. While the bulls remain in control in the short-term, we continue to believe the broad equity market is not yet out of the woods and remains vulnerable -- particularly as Wall Street sentiment has flipped bullish. In today’s report we highlight attractive stocks from a relative strength perspective across Sectors.

Continued encouraging COVID-19 news and accommodative moves by the Fed have allowed the bulls to remain in control while short-term support on the S&amp;P 500 held near 2,450. While the bulls remain in control in the short-term, we continue to believe the broad equity market is not yet out of the woods and remains vulnerable -- particularly as Wall Street sentiment has flipped bullish. In today’s report we highlight attractive stocks from a relative strength perspective across Sectors.

U.S. Equity Strategy: Bulls Still In Driver’s Seat, But For How Long?

Several equity indexes and indicators we watch are telling us an initial primary low has been established for global equities (ACWI-US). At the same time, after this type of major waterfall decline there is often a test of this initial low - and oftentimes we get an undercut of the initial low. Barring approval of a first-line therapy for COVID-19 we are of the belief that we will get an eventual test of this initial low and potentially an undercut. In this report we highlight key technical levels and indicators to watch and suggest investment opportunities with defensive and/or growth characteristics. We are also expanding our recommendations to include bottom-up ideas within several other Sectors.

Several equity indexes and indicators we watch are telling us an initial primary low has been established for global equities (ACWI-US). At the same time, after this type of major waterfall decline there is often a test of this initial low - and oftentimes we get an undercut of the initial low. Barring approval of a first-line therapy for COVID-19 we are of the belief that we will get an eventual test of this initial low and potentially an undercut. In this report we highlight key technical levels and indicators to watch and suggest investment opportunities with defensive and/or growth characteristics. We are also expanding our recommendations to include bottom-up ideas within several other Sectors.

Global Equity Strategy: Initial Low Established

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

Zijin Gold International / Index Rebalance

<ul>
<li>There are 9 additions for the <a href="https://www.smartkarma.com/entities/vaneck-gold-miners-etf-usa" target="_blank" data-smartkarma-citation="entities:32924:1" rel="noopener">VanEck Gold Miners ETF/USA (GDX US)</a> in June. Plus, one listing switch and a whole bunch of float and capping changes.</li>
<li>Estimated one-way turnover is 6.2% and that leads to a round-trip trade of US$3.4bn. There are many stocks with multiple days of ADV to trade from passive trackers.</li>
<li>
<a href="https://www.smartkarma.com/entities/zijin-gold-international-company-limited" target="_blank" data-smartkarma-citation="entities:45448:1" rel="noopener">Zijin Gold International (2259 HK)</a> has been added following an increase in free float, and the passive buying could provide short-term support for the stock.</li>
</ul>


There are 9 additions for the VanEck Gold Miners ETF/USA (GDX US) in June. Plus, one listing switch and a whole bunch of float and capping changes.
Estimated one-way turnover is 6.2% and that leads to a round-trip trade of US$3.4bn. There are many stocks with multiple days of ADV to trade from passive trackers.

Zijin Gold International (2259 HK) has been added following an increase in free float, and the passive buying could provide short-term support for the stock.


Gold Miners ETF (GDX US) June Rebalance: 9 Adds and US$3.4bn Trade

<ul>
<li>There could be 3 inclusions for the <a href="https://www.smartkarma.com/entities/vaneck-gold-miners-etf-usa" target="_blank" data-smartkarma-citation="entities:32924:1" rel="noopener">VanEck Gold Miners ETF/USA (GDX US)</a> in June. There are 3 more stocks that are close on free float market cap.</li>
<li>Following the lock-up expiry in March, <a href="https://www.smartkarma.com/entities/zijin-gold-international" target="_blank" data-smartkarma-citation="entities:45448:1" rel="noopener">Zijin Gold (2259 HK)</a>'s float increases above 10% and the stock is a high probability inclusion at the June rebalance. </li>
<li>With the 3 adds and capping changes, estimated one-way turnover is 2.4% resulting in a round-trip trade of US$1.6bn.</li>
</ul>


There could be 3 inclusions for the VanEck Gold Miners ETF/USA (GDX US) in June. There are 3 more stocks that are close on free float market cap.
Following the lock-up expiry in March, Zijin Gold (2259 HK)'s float increases above 10% and the stock is a high probability inclusion at the June rebalance. 
With the 3 adds and capping changes, estimated one-way turnover is 2.4% resulting in a round-trip trade of US$1.6bn.


Gold Miners ETF (GDX US) June Rebalance: 3 Adds Likely; US$1.6bn Trade

Materials, IPO & Equity Analyst

Venkat Ramana Nandyal

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Commodities

we expand on our previous note <a href="https://www.smartkarma.com/insights/gold-is-it-the-beginning-of-new-golden-era-or-end-of-the-bull-run" target="_blank" data-smartkarma-citation="insights:12832" rel="noopener">Gold: Is It the Beginning of New Golden Era or End of the Bull Run?</a> Our analysis of returns on gold and gold-stock indicates the following:<ul>
<li>Gold stocks and gold commodity had no returns in FY18,</li>
<li>YTD FY19 gold stocks returns were superior compared to gold commodity,</li>
<li>Our portfolio of 11 gold producers returned 55% YTD with a Sharpe ratio of ~2.</li>
<li>Given the volatility in markets, we believe that ‘flight to safety’ will continue in short to mid-term, supporting gold prices.</li>
</ul>

we expand on our previous note Gold: Is It the Beginning of New Golden Era or End of the Bull Run? Our analysis of returns on gold and gold-stock indicates the following:
Gold stocks and gold commodity had no returns in FY18,
YTD FY19 gold stocks returns were superior compared to gold commodity,
Our portfolio of 11 gold producers returned 55% YTD with a Sharpe ratio of ~2.
Given the volatility in markets, we believe that ‘flight to safety’ will continue in short to mid-term, supporting gold prices.


Canada

Barrick Gold Corporation is an international gold company with operating mines and development projects in the United States, Canada, South America, Australia, and Africa.

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Barrick Gold (ABX CN)

U.S. Equity Strategy: Bulls Still In Driver’s Seat, But For How Long?

Continued encouraging COVID-19 news and accommodative moves by the Fed have allowed the bulls to remain in control while short-term support on the...

Vermilion Research

Global Equity Strategy: Initial Low Established

Several equity indexes and indicators we watch are telling us an initial primary low has been established for global equities (ACWI-US). At the...

Vermilion Research

Gold Miners ETF (GDX US) June Rebalance: 9 Adds and US$3.4bn Trade

9 adds, float and capping changes result in an estimated one-way turnover of 6.2% and to a round-trip trade of US$3.4bn. There are many stocks with...

Brian Freitas

Gold Miners ETF (GDX US) June Rebalance: 3 Adds Likely; US$1.6bn Trade

The June changes for GDX will be announced after market close today and implemented after market close on 19 June. We forecast 5 adds: Zijin Gold,...

Brian Freitas

Gold: Gold Stocks Making a Comeback?

we expand on our previous note Gold: Is It the Beginning of New Golden Era or End of the Bull Run? Our analysis of returns on gold and gold-stock...

Venkat Ramana Nandyal

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