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

MSCI Emerging Markets Index / Technical Analysis

Price and RS uptrends for the MSCI EM index continues to underpin our bullish outlook for emerging market equities -- remain overweight. We continue to attribute much of EM’s outperformance to the intact downtrend in the US dollar (DXY). As long as weakness in the DXY persists we believe EM’s outperformance is likely to continue.

Price and RS uptrends for the MSCI EM index continues to underpin our bullish outlook for emerging market equities -- remain overweight. We continue to attribute much of EM’s outperformance to the intact downtrend in the US dollar (DXY). As long as weakness in the DXY persists we believe EM’s outperformance is likely to continue.

EM Remains Global Leadership -- Remain Overweight

Major global indexes (MSCI ACWI, ACWI ex-US, EM, and EAFE) continue to trend higher and are devoid of bearish inflections. Additionally, the US dollar (DXY) is likely headed lower, something we view as a positive risk-on signal for global equities. As a result, we remain bullish and we continue to recommend adding exposure on pullbacks.

Major global indexes (MSCI ACWI, ACWI ex-US, EM, and EAFE) continue to trend higher and are devoid of bearish inflections. Additionally, the US dollar (DXY) is likely headed lower, something we view as a positive risk-on signal for global equities. As a result, we remain bullish and we continue to recommend adding exposure on pullbacks.

Japan Breaking Out; EM Remains Leadership

As we highlighted in last week’s Int’l Compass, the weight of the evidence suggests commodities are in the early stages of a new secular bull market. Global Materials remains a favorite Sector overweight and we believe outperformance is likely to continue considering the Sector’s long-term bullish RS reversal. Additionally, we are upgrading equal-weighted Energy to overweight due to bullish price and RS inflections -- add exposure with a focus on small- and mid-caps.

As we highlighted in last week’s Int’l Compass, the weight of the evidence suggests commodities are in the early stages of a new secular bull market. Global Materials remains a favorite Sector overweight and we believe outperformance is likely to continue considering the Sector’s long-term bullish RS reversal. Additionally, we are upgrading equal-weighted Energy to overweight due to bullish price and RS inflections -- add exposure with a focus on small- and mid-caps.

Global Commodity-Related Equity Sectors In Secular Bull

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>There are 22 changes for the Nifty200 Momentum 30 Index and 1 change for the Nifty100 Low Volatility 30 Index that will be implemented at the close on 29 June.</li>
<li>The round-trip trade across both indices is estimated at just over US$2bn and there are 18 stocks that have over 1x ADV to trade from passives.</li>
<li>A number of the inclusions will have inflows from global and local passive trackers over the next few months.</li>
</ul>


There are 22 changes for the Nifty200 Momentum 30 Index and 1 change for the Nifty100 Low Volatility 30 Index that will be implemented at the close on 29 June.
The round-trip trade across both indices is estimated at just over US$2bn and there are 18 stocks that have over 1x ADV to trade from passives.
A number of the inclusions will have inflows from global and local passive trackers over the next few months.


NIFTY200 Momentum30 / Nifty100 LowVol30 Index Rebalance: Over US$2bn to Trade in June

Shanghai Stock Exchange Composite Index / Technical Analysis

Shanghai Stock Exchange Composite Index (SHCOMP INDEX)

Geopolitical concerns aside, a weakening US dollar (DXY) continues to be a major tailwind for both EM equities and the commodity Sectors. Improving price and RS trends for these risk-on areas of the market are among the many characteristics consistent with historical bull markets. Therefore, we continue to label this a bull market and we believe global equities are still in the early innings of a broad-based advance. Commodity Sectors make up a majority of our EM-focused recommendations in this report.

Geopolitical concerns aside, a weakening US dollar (DXY) continues to be a major tailwind for both EM equities and the commodity Sectors. Improving price and RS trends for these risk-on areas of the market are among the many characteristics consistent with historical bull markets. Therefore, we continue to label this a bull market and we believe global equities are still in the early innings of a broad-based advance. Commodity Sectors make up a majority of our EM-focused recommendations in this report.

EM Remains In Favor; Shanghai Comp Breaking Out

India

Bharat Forge is an Indian multinational company and a global leader in manufacturing high-performance, safety-critical forged and machined components for the automotive, aerospace, defense, railways, and industrial equipment sectors. The company provides a wide range of products including crankshafts, connecting rods, chassis components, and powertrain solutions. Bharat Forge was founded on June 19, 1961, and is headquartered in Pune, Maharashtra, India.

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Bharat Forge (BHFC IN)

EM Remains Global Leadership -- Remain Overweight

Price and RS uptrends for the MSCI EM index continues to underpin our bullish outlook for emerging market equities -- remain overweight.

Vermilion Research

Japan Breaking Out; EM Remains Leadership

Major global indexes continue to trend higher and are devoid of bearish inflections. As a result, we remain bullish and we continue to recommend...

Vermilion Research

NIFTY200 Momentum30 / Nifty100 LowVol30 Index Rebalance: Over US$2bn to Trade in June

The deletes have outperformed the adds by 4.7% since the announcement of the changes. The passives trade at the close today and those flows could...

Brian Freitas

EM Remains In Favor; Shanghai Comp Breaking Out

Geopolitical concerns aside, a weakening US dollar (DXY) continues to be a major tailwind for both EM equities and the commodity Sectors. Improving...

Vermilion Research

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

EM Remains Global Leadership -- Remain Overweight

Price and RS uptrends for the MSCI EM index continues to underpin our bullish outlook for emerging market equities -- remain overweight.

Vermilion Research

Japan Breaking Out; EM Remains Leadership

Major global indexes continue to trend higher and are devoid of bearish inflections. As a result, we remain bullish and we continue to recommend...

Vermilion Research

Global Commodity-Related Equity Sectors In Secular Bull

We believe commodities are in the early stages of a new secular bull market. Global Materials & Energy remain our favorite Sector overweights - add...

Vermilion Research

NIFTY200 Momentum30 / Nifty100 LowVol30 Index Rebalance: Over US$2bn to Trade in June

The deletes have outperformed the adds by 4.7% since the announcement of the changes. The passives trade at the close today and those flows could...

Brian Freitas

EM Remains In Favor; Shanghai Comp Breaking Out

Geopolitical concerns aside, a weakening US dollar (DXY) continues to be a major tailwind for both EM equities and the commodity Sectors. Improving...

Vermilion Research