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

<ul>
<li>Since mid-April we discussed how downside was limited on MSCI ACWI and EURO STOXX 50, and May 2nd discussed it was "quite possible" the lows were in.</li>
<li>Now, the MSCI ACWI, ACWI ex-US, EAFE, and EM indexes have all broken out to new multi-year highs. Our bullish outlook (since early-November 2023) remains intact; expect higher prices ahead.</li>
<li>China (MSCI China) continues to lead the EM turnaround, and we remain bullish on the space. We highlight many large-cap EM buys within Communications, Technology, Discretionary; we remain bullish miners.</li>
</ul>


Since mid-April we discussed how downside was limited on MSCI ACWI and EURO STOXX 50, and May 2nd discussed it was "quite possible" the lows were in.
Now, the MSCI ACWI, ACWI ex-US, EAFE, and EM indexes have all broken out to new multi-year highs. Our bullish outlook (since early-November 2023) remains intact; expect higher prices ahead.
China (MSCI China) continues to lead the EM turnaround, and we remain bullish on the space. We highlight many large-cap EM buys within Communications, Technology, Discretionary; we remain bullish miners.


Bullish Outlook Intact; EM and China Continue to Bottom; Buys in Comms, Tech, Discretionary, Miners

EURO STOXX 50 Price EUR / Technical Analysis

<ul>
<li>We continue to view the latest pullback as healthy and normal within the ongoing bull market on MSCI ACWI (ACWI-US) and the EURO STOXX 50, as discussed April 18</li>
<li>Discussed last Thursday(4/18/24) how further downside may be limited with these indexes 4-5% off their highs, combined with ACWI-US testing gap support ($105) and the EURO STOXX50 testing 6-month uptrend. </li>
<li>So far, these supports have held strong, and Japan's TOPIX has also held strong above 2615 support -- with all producing strong bounces far this week.</li>
</ul>


We continue to view the latest pullback as healthy and normal within the ongoing bull market on MSCI ACWI (ACWI-US) and the EURO STOXX 50, as discussed April 18
Discussed last Thursday(4/18/24) how further downside may be limited with these indexes 4-5% off their highs, combined with ACWI-US testing gap support ($105) and the EURO STOXX50 testing 6-month uptrend. 
So far, these supports have held strong, and Japan's TOPIX has also held strong above 2615 support -- with all producing strong bounces far this week.


Upgrading Europe to Overweight; Supports Holding on MSCI ACWI, ACWI Ex-US, EAFE, and EM

US Treasury (10 Yr Generic) / Technical Analysis

<ul>
<li>We continue to see more and more global indexes and Sectors breaking out to new highs. This is classic bull market behavior. The latest breakouts: Israel, Germany, and Sweden</li>
<li>Our bullish outlook (since early November 2023) on global equities (MSCI ACWI) remains intact; continue to ride this trend higher, and treat pullbacks as buying opportunities.</li>
<li>We continue to get more evidence suggesting the US Dollar (DXY) is rolling over, and quite likely that global sovereign 10-year yields are rolling over as well. Risk-on.</li>
</ul>


We continue to see more and more global indexes and Sectors breaking out to new highs. This is classic bull market behavior. The latest breakouts: Israel, Germany, and Sweden
Our bullish outlook (since early November 2023) on global equities (MSCI ACWI) remains intact; continue to ride this trend higher, and treat pullbacks as buying opportunities.
We continue to get more evidence suggesting the US Dollar (DXY) is rolling over, and quite likely that global sovereign 10-year yields are rolling over as well. Risk-on.


Bullish Outlook Intact; DXY Rolling Over; More Global Breakouts. Buys in Discretionary, Tech

<ul>
<li>Since early November 2023 we have been expecting global equities (MSCI ACWI) to stage a year-end rally that would continue into the early part of 2024.</li>
<li>As we progress through the “early part” of 2024, more global indexes and Sectors are breaking out and starting to participate in the upside. This is classic bull market behavior.</li>
<li>Our outlook remains bullish; continue to ride this trend higher, and treat pullbacks as buying opportunities. Actionable Themes: Hong Kong/China, Consumer Discretionary, Industrials, Energy/Coal, and Polish Banks</li>
</ul>


Since early November 2023 we have been expecting global equities (MSCI ACWI) to stage a year-end rally that would continue into the early part of 2024.
As we progress through the “early part” of 2024, more global indexes and Sectors are breaking out and starting to participate in the upside. This is classic bull market behavior.
Our outlook remains bullish; continue to ride this trend higher, and treat pullbacks as buying opportunities. Actionable Themes: Hong Kong/China, Consumer Discretionary, Industrials, Energy/Coal, and Polish Banks


Hong Kong/China Finally Bottoming?; Bullish Outlook Intact; DXY Rolling Over; Buys in Discretionary

HK/China Equity Long-Short

Osbert Tang, CFA

Thematic (Sector/Industry)

<ul>
<li>
<a href="https://www.smartkarma.com/entities/anta-sports-products-ltd" target="_blank" data-smartkarma-citation="entities:10261:1" rel="noopener">Anta Sports Products (2020 HK)</a> will likely see its 4Q22 and 1Q23 businesses negatively affected by the increase in infections as China loosens its COVID combating measures.</li>
<li>The market environment faced by <a href="https://www.smartkarma.com/entities/bosideng-international-holdings-ltd" target="_blank" data-smartkarma-citation="entities:6537:1" rel="noopener">Bosideng International Holdings (3998 HK)</a> is more challenging as peak season demand is affected. However, the positive long-term growth story remains unchanged.</li>
<li>
<a href="https://www.smartkarma.com/entities/haier-smart-home-co-ltd-b3ef445f-0f54-4586-8c58-9073de98d60e" target="_blank" data-smartkarma-citation="entities:31105:1" rel="noopener">Haier Smart Home Co Ltd (6690 HK)</a> will be less affected when compared with the other two. We see better margin in FY23 and share buyback is positive. </li>
</ul>



Anta Sports Products (2020 HK) will likely see its 4Q22 and 1Q23 businesses negatively affected by the increase in infections as China loosens its COVID combating measures.
The market environment faced by Bosideng International Holdings (3998 HK) is more challenging as peak season demand is affected. However, the positive long-term growth story remains unchanged.

Haier Smart Home Co Ltd (6690 HK) will be less affected when compared with the other two. We see better margin in FY23 and share buyback is positive. 


China Consumer Discretionary: Short-Term Tough Buying Long-Term Up

Hong Kong

Bosideng is the largest down clothing company in the PRC, specializing in the research, design, development, manufacturing, marketing, and distribution of branded down apparel. The company also offers ladieswear, school uniforms, and provides OEM services. It was founded in 1976 and is headquartered in Hong Kong.

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Bosideng (3998 HK)

Bullish Outlook Intact; EM and China Continue to Bottom; Buys in Comms, Tech, Discretionary, Miners

Bullish Outlook Intact $ACWI; EM and China Continue to Lead; U.S. Dollar (DXY), WTI Crude Oil, and Gasoline Prices Rolling Over; Buys in: Comms,...

Vermilion Research

Upgrading Europe to Overweight; Supports Holding on MSCI ACWI, ACWI Ex-US, EAFE, and EM

Upgrading Europe to Overweight EURO $STOXX 50 $FEZ; Supports Holding on MSCI $ACWI, $ACWX, $EFA, and $EEM. Latest 4-6% pullback remains healthy...

Vermilion Research

Bullish Outlook Intact; DXY Rolling Over; More Global Breakouts. Buys in Discretionary, Tech

Bullish Outlook Intact; $DXY Rolling Over, 10-Yr Treasury Yield $TNX Rolling Over; More Global Indexes Breaking Out (Israel, Germany, Sweden). Buys...

Vermilion Research

Hong Kong/China Finally Bottoming?; Bullish Outlook Intact; DXY Rolling Over; Buys in Discretionary

Hong Kong/China Finally Bottoming?; Bullish Overall Outlook Intact; $DXY Rolling Over; Actionable Themes: Hong Kong/China, Consumer Discretionary,...

Vermilion Research

China Consumer Discretionary: Short-Term Tough Buying Long-Term Up

The increase in infections will drag on operating performance for China's consumer discretionary names in the near term. However, we should not...

Osbert Tang, CFA

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