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>More restrictive Fed policy than expected is disproportionately hitting small/mid-caps which are more sensitive to higher interest rates. This suggests we could see further consolidation for small- and mid-caps.</li>
<li>Large-Caps (SPX, Nasdaq 100, DJI) remain bullish on continued strength from mega-caps (AMZN, META, NVDA,MSFT). Our bullish outlook remains appropriate, but we discuss what would lead us to get cautious.</li>
<li>1-, 2-, and 10-year Treasury yields testing resistance today and failing. U.S. dollar (DXY) also testing key resistance at $104.60. We also push back on the bad breadth argument (again).</li>
</ul>


More restrictive Fed policy than expected is disproportionately hitting small/mid-caps which are more sensitive to higher interest rates. This suggests we could see further consolidation for small- and mid-caps.
Large-Caps (SPX, Nasdaq 100, DJI) remain bullish on continued strength from mega-caps (AMZN, META, NVDA,MSFT). Our bullish outlook remains appropriate, but we discuss what would lead us to get cautious.
1-, 2-, and 10-year Treasury yields testing resistance today and failing. U.S. dollar (DXY) also testing key resistance at $104.60. We also push back on the bad breadth argument (again).


Monitoring Rising Treasury Yields & U.S. Dollar (DXY); What Would Lead Us to Get Cautious?

<ul>
<li>Over the past two weeks, we have been steadfast in our belief that this current rally/short squeeze is likely to fizzle in the 4100-4165 area on the S&amp;P 500.</li>
<li>There has yet to be any meaningful deterioration and we cannot rule out the SPX reaching higher, potentially for 4300-4325 (August 2022 highs).</li>
<li>We continue to preach caution and believe upside is limited on the market indexes. Any combination of a continued strong labor market or hotter-than-expected inflation could upset the market.</li>
</ul>


Over the past two weeks, we have been steadfast in our belief that this current rally/short squeeze is likely to fizzle in the 4100-4165 area on the S&amp;P 500.
There has yet to be any meaningful deterioration and we cannot rule out the SPX reaching higher, potentially for 4300-4325 (August 2022 highs).
We continue to preach caution and believe upside is limited on the market indexes. Any combination of a continued strong labor market or hotter-than-expected inflation could upset the market.


Downgrading Energy; SPX Final Reach Up to 4300-4325?; Buys in Restaurants, Retailers, Industrials

<p>Despite the Nasdaq 100 getting quantitatively extended, the weight of the evidence continues to suggest that our bullish outlook remains appropriate. We elaborate below and also highlight some developments we are watching that could alter our outlook. In today’s report we highlight attractive Groups and stocks within Consumer Discretionary &amp; Health Care: Restaurants, Fast Food, Small-Cap, Casual Dining, and Hospitals.</p>

Despite the Nasdaq 100 getting quantitatively extended, the weight of the evidence continues to suggest that our bullish outlook remains appropriate. We elaborate below and also highlight some developments we are watching that could alter our outlook. In today’s report we highlight attractive Groups and stocks within Consumer Discretionary &amp; Health Care: Restaurants, Fast Food, Small-Cap, Casual Dining, and Hospitals.

U. S. Equity Strategy: Still Bullish, But Also Extended Near-Term

President, Vision Research

Robert C Prather Jr

President

Vision Research

Vision Research was formed in 2004 with the vision of generating the best possible fundamental analysis and investment research for smid cap US equities. In 2008, we broadened our coverage to include mid/large cap US stocks.  After researching a  few ideas outside the US each year for a number of years, we launched a dedicated non-US equity product at the end of 2015.  This was followed by the introduction of a product focused on IPOs in mid-2017.

Fundamental Insight

Equity Bottom-Up

<p>Casual dining has been losing traffic to fast casual for quite sometime, and Brinker has not been immune to this.  Evidence of this can be seen in Brinker's pre-COVID traffic data and margins that have been under pressure for years.  Despite this investors are extremely optimistic about future results as the economy re-opens, with estimates calling for results to significantly exceed those prior to COVID and the current stock price near an all time high.</p>

Casual dining has been losing traffic to fast casual for quite sometime, and Brinker has not been immune to this.  Evidence of this can be seen in Brinker's pre-COVID traffic data and margins that have been under pressure for years.  Despite this investors are extremely optimistic about future results as the economy re-opens, with estimates calling for results to significantly exceed those prior to COVID and the current stock price near an all time high.

Brinker International (EAT): Casual Dining Headwinds, Optimistic Estimates & Above Average Multiples

United States

Brinker International, Inc. is a restaurant operator who owns, operates or franchises establishments in the United States and internationally.  These restaurants offer customers burgers, ribs, salads, steaks, classic Italian fare, and Tex-Mex offerings.

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Brinker International (EAT US)

Monitoring Rising Treasury Yields & U.S. Dollar (DXY); What Would Lead Us to Get Cautious?

Monitoring Rising Treasury Yields & U.S. Dollar. 1-, 2-, and 10-year Treasury yields $TNX failing at shorter-term resistances today; $DXY below...

Vermilion Research

Downgrading Energy; SPX Final Reach Up to 4300-4325?; Buys in Restaurants, Retailers, Industrials

We have expected this squeeze to fizzle in the 4100-4165 $SPX area, but with no meaningful deterioration, we could see the $SPX reach for 4300-4325...

Vermilion Research

U. S. Equity Strategy: Still Bullish, But Also Extended Near-Term

Despite the Nasdaq 100 getting quantitatively extended, the weight of the evidence continues to suggest that our bullish outlook remains...

Vermilion Research

Brinker International (EAT): Casual Dining Headwinds, Optimistic Estimates & Above Average Multiples

Elevated multiples on top of aggressive estimates for a business that has long term traffic problems and margin deterioration.

Robert C Prather Jr

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