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

Rex American Resources / Technical Analysis

<ul>
<li>We remain near-term bullish since our 4/22/25 Compass, and our intermediate-term outlook remains bullish as well (as of our 5/14/25 Compass).</li>
<li>We will maintain our bullish outlook as long as market dynamics remain healthy and the SPX is above 6028-6059. Short-term supports on SPX include 6400-6410, 6200, 6100-6150, and 6028-6059.</li>
<li>SPX is testing 6400-6410 now, but QQQ and IWM are violating short-term supports at $572 and $226, respectively. This makes us believe we could see some near-term downside; buy pullbacks.</li>
</ul>


We remain near-term bullish since our 4/22/25 Compass, and our intermediate-term outlook remains bullish as well (as of our 5/14/25 Compass).
We will maintain our bullish outlook as long as market dynamics remain healthy and the SPX is above 6028-6059. Short-term supports on SPX include 6400-6410, 6200, 6100-6150, and 6028-6059.
SPX is testing 6400-6410 now, but QQQ and IWM are violating short-term supports at $572 and $226, respectively. This makes us believe we could see some near-term downside; buy pullbacks.


Staying Bullish Despite Near-Term Pullback Potential; Buy Pullbacks

Founder & Managing Director, AIR Control Tower, AIR Control Tower

Neil Glynn

Founder & Managing Director, AIR Control Tower

AIR Control Tower

AIR Control Tower is an independent research and analysis platform. Its mission is to provide impactful insight and analysis across the global airline industry at a company and market level via detailed financial models to aid decision making for key stake holders at a time when risks have seldom, if ever, been higher and the global sector grapples with the imperative of funding de-carbonisation. Unique analysis forecasting global carrier-level earnings/cash flows, and restructuring/de-leveraging prospects, is designed to dynamically assess the health of the industry, predict surprises and identify potential requirements for third party support.

Insights on the global airline industry

Equity Bottom-Up

International Consolidated Airlines Group / Equity Bottom-Up

International Consolidated Airlines Group

<ul>
<li>Following highly challenged 1H24 performances from Air France-KLM and Lufthansa, but strength from IAG, we publish a deep dive on the drivers of divergent performances.</li>
<li>We raise our forecasts at IAG but make heavy cuts at Air France-KLM and Lufthansa, with concerns over their ability to improve over pre-pandemic performances.</li>
<li>This critical juncture, as each carrier implements some type of transformation plan, and carriers around the world see earnings re-set downwards, requires strong governance for expanding portfolios of airlines.</li>
</ul>


Following highly challenged 1H24 performances from Air France-KLM and Lufthansa, but strength from IAG, we publish a deep dive on the drivers of divergent performances.
We raise our forecasts at IAG but make heavy cuts at Air France-KLM and Lufthansa, with concerns over their ability to improve over pre-pandemic performances.
This critical juncture, as each carrier implements some type of transformation plan, and carriers around the world see earnings re-set downwards, requires strong governance for expanding portfolios of airlines.


European Airlines – Moving Parts Within Group Performances Illustrate Structural Requirements

<ul>
<li>Lufthansa mainline losses in 2024 force management to pursue transformation</li>
<li>​Portfolio management challenges driven by a variety of factors including LH mainline unit costs and pricing at sister companies</li>
<li>Much work to do to turn ITA around, while firm management focus is required at home</li>
</ul>


Lufthansa mainline losses in 2024 force management to pursue transformation
​Portfolio management challenges driven by a variety of factors including LH mainline unit costs and pricing at sister companies
Much work to do to turn ITA around, while firm management focus is required at home


Lufthansa Group – Revisiting Margin and Portfolio Management Challenges

<ul>
<li>Forward looking fare data suggests pricing further weakening for the European flag carriers on long haul in particular.</li>
<li>We expect Lufthansa to miss EBIT guidance by 30% in 2024 while we also cut Air France-KLM 2024 EBIT by 15%.</li>
<li>IAG stands out as most resilient, with BA seemingly outperforming peer pricing on the Transatlantic.</li>
</ul>


Forward looking fare data suggests pricing further weakening for the European flag carriers on long haul in particular.
We expect Lufthansa to miss EBIT guidance by 30% in 2024 while we also cut Air France-KLM 2024 EBIT by 15%.
IAG stands out as most resilient, with BA seemingly outperforming peer pricing on the Transatlantic.


European Airlines - Fare Softening Suggests Elevated Earnings Risk with Self-Help Stories Crucial

HK/China Equity Long-Short

Osbert Tang, CFA

Cathay Pacific Airways / Equity Bottom-Up

<ul>
<li>With more foreign countries being granted visa-free visits to China, <a href="https://www.smartkarma.com/entities/cathay-pacific-airways-ltd" target="_blank" data-smartkarma-citation="entities:243:1" rel="noopener">Cathay Pacific Airways (293 HK)</a> will benefit from more transfer traffic via Hong Kong.</li>
<li>Recovery is decent with passenger traffic rising 37.5% in 5M24. CX's capacity already returned to 80% of pre-pandemic in 2Q24, and this will reach 100% in 1Q25. </li>
<li>YTD, CX is still a laggard relative to many global airlines. Its P/B valuation is not stretched at 0.8x, given ROE of 11% over the next 3 years.  </li>
</ul>


With more foreign countries being granted visa-free visits to China, Cathay Pacific Airways (293 HK) will benefit from more transfer traffic via Hong Kong.
Recovery is decent with passenger traffic rising 37.5% in 5M24. CX's capacity already returned to 80% of pre-pandemic in 2Q24, and this will reach 100% in 1Q25. 
YTD, CX is still a laggard relative to many global airlines. Its P/B valuation is not stretched at 0.8x, given ROE of 11% over the next 3 years.  


Cathay Pacific (293 HK): Multiple Positive Developments

Germany

Deutsche Lufthansa Aktiengesellschaft provides passenger and cargo air transportation services worldwide. The Company offers flight and connection programs in North America, Scandinavia, and Asia. Deutsche Lufthansa also provides travel agency, catering, and aircraft maintenance services.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Deutsche Lufthansa (LHA GR)

Staying Bullish Despite Near-Term Pullback Potential; Buy Pullbacks

Buying a pullback; SPX testing 6400-6410 now, but QQQ and IWM are violating short-term supports at $572 and $226. This makes us believe we could...

Vermilion Research

European Airlines – Moving Parts Within Group Performances Illustrate Structural Requirements

Deep dive into the divergent economics of each airline within the expanding European network carrier groups AF-KLM, IAG, Lufthansa to illustrate...

Neil Glynn

Lufthansa Group – Revisiting Margin and Portfolio Management Challenges

Lufthansa's latest profit warning includes the message that Lufthansa mainline needs a transformation programme. We outline the issues at LH...

Neil Glynn

European Airlines - Fare Softening Suggests Elevated Earnings Risk with Self-Help Stories Crucial

We re-highlight our recent forecast cuts at Air France-KLM and Lufthansa following Air France-KLM's profit warning today, which was due to the...

Neil Glynn

Cathay Pacific (293 HK): Multiple Positive Developments

As more countries gain visa-free access to China, CX will benefit from increased transfer traffic. CX's recovery is on track with passenger...

Osbert Tang, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Staying Bullish Despite Near-Term Pullback Potential; Buy Pullbacks

Buying a pullback; SPX testing 6400-6410 now, but QQQ and IWM are violating short-term supports at $572 and $226. This makes us believe we could...

Vermilion Research

European Airlines – Moving Parts Within Group Performances Illustrate Structural Requirements

Deep dive into the divergent economics of each airline within the expanding European network carrier groups AF-KLM, IAG, Lufthansa to illustrate...

Neil Glynn

Lufthansa Group – Revisiting Margin and Portfolio Management Challenges

Lufthansa's latest profit warning includes the message that Lufthansa mainline needs a transformation programme. We outline the issues at LH...

Neil Glynn

European Airlines - Fare Softening Suggests Elevated Earnings Risk with Self-Help Stories Crucial

We re-highlight our recent forecast cuts at Air France-KLM and Lufthansa following Air France-KLM's profit warning today, which was due to the...

Neil Glynn

Cathay Pacific (293 HK): Multiple Positive Developments

​As more countries gain visa-free access to China, CX will benefit from increased transfer traffic. CX's recovery is on track with passenger...

Osbert Tang, CFA

As more countries gain visa-free access to China, CX will benefit from increased transfer traffic. CX's recovery is on track with passenger...