Global Cross-Asset Energy Analyst, VAC Investments

Aaditya Chintalapati, CFA

Global Cross-Asset Energy Analyst

Thematic (Sector/Industry)

South Africa has limited historical oil and gas production, with current production of c.25 Kboe/day largely gas-focused for the Mossel Bay GTL plant. However, we have seen renewed industry interest in offshore South African exploration licenses recently, following significant oil discoveries around the Falkland Islands. With farm-ins by <a href="https://www.smartkarma.com/entities/812" target="_blank" data-smartkarma-citation="entities:812:1">Total Sa (FP FP)</a> , <a href="https://www.smartkarma.com/entities/21030" target="_blank" data-smartkarma-citation="entities:21030:1">Statoil ASA (STL NO)</a> and Qatar Petroleum in late-2017/early-2018, coupled with robust oil price expectations for the medium-term, we believe the region is well placed for near-term frontier exploration and significant resource upside potential. Following its recent USD 45m private placement, we highlight Africa Energy Corp (AFE TSX) as a well-funded top pick to play this theme.

South Africa has limited historical oil and gas production, with current production of c.25 Kboe/day largely gas-focused for the Mossel Bay GTL plant. However, we have seen renewed industry interest in offshore South African exploration licenses recently, following significant oil discoveries around the Falkland Islands. With farm-ins by Total Sa (FP FP) , Statoil ASA (STL NO) and Qatar Petroleum in late-2017/early-2018, coupled with robust oil price expectations for the medium-term, we believe the region is well placed for near-term frontier exploration and significant resource upside potential. Following its recent USD 45m private placement, we highlight Africa Energy Corp (AFE TSX) as a well-funded top pick to play this theme.

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

The MSCI ACWI and S&amp;P 500 have both achieved a higher high relative to mid-April prices, which we see as a potential early indication of a bullish trend change. Combine this with improving market internals and we are becoming incrementally more bullish. For the MSCI ACWI, one of the more concerning breadth indicators has been the percentage of stocks above their 200-day moving average. This indicator recently hit a higher high (see below, left), a positive development that confirms the market’s recent advance. In today's report we highlight opportunities within global Energy and Technology companies, two of our overweights.

The MSCI ACWI and S&amp;P 500 have both achieved a higher high relative to mid-April prices, which we see as a potential early indication of a bullish trend change. Combine this with improving market internals and we are becoming incrementally more bullish. For the MSCI ACWI, one of the more concerning breadth indicators has been the percentage of stocks above their 200-day moving average. This indicator recently hit a higher high (see below, left), a positive development that confirms the market’s recent advance. In today's report we highlight opportunities within global Energy and Technology companies, two of our overweights. 

Global Energy Shares Breaking Out; Technology Remains Attractive

The recent successful test of support at the 200-day moving average has paved the way for a meaningful bounce higher on the S&amp;P 500. Given this bounce, we have become incrementally more bullish. In today’s report we highlight the bullish implications of the recent move higher for the broad market as well as attractive and actionable groups within the Energy Sector: EN-02 Oil &amp; Gas, Global, Large-Cap, EN-08 Oil and Gas E&amp;P, Domestic, Large-Cap, and EN-10 Oil and Gas E&amp;P, Domestic Small-Cap.

The recent successful test of support at the 200-day moving average has paved the way for a meaningful bounce higher on the S&amp;P 500. Given this bounce, we have become incrementally more bullish. In today’s report we highlight the bullish implications of the recent move higher for the broad market as well as attractive and actionable groups within the Energy Sector: EN-02 Oil &amp; Gas, Global, Large-Cap, EN-08 Oil and Gas E&amp;P, Domestic, Large-Cap, and EN-10 Oil and Gas E&amp;P, Domestic Small-Cap.

U.S. Equity Strategy: Opportunities in Energy Stocks

Global markets are holding at support levels and we reiterate, our neutral but constructive outlook . In today’s report we highlight actionable stocks within countries that are displaying bullish price and relative strength trends, including Japan, Hong Kong, Italy and Norway.

Global markets are holding at support levels and we reiterate, our neutral but constructive outlook . In today’s report we highlight actionable stocks within countries that are displaying bullish price and relative strength trends, including Japan, Hong Kong, Italy and Norway.

Global Equity Strategy: Overweight TOPIX, Hang Seng

TSE Tokyo Price Index TOPIX / Technical Analysis

Economic data finally confirms what the charts have been saying all year: global growth in the major regions is now in sync.  We see the bullish advance in equities continuing well into 2018, a continuation of a long-term trend. However, the Sectors that propel this trend may be different.In our December International Strategy, we explore these and the following themes in further detail: <ul><li>Overweight Japan. </li><li>Cyclicals continue to lead, defensive continues to lag. </li><li>Actionable Sector/Group themes:<ol><li>Global banks are breaking out/bullishly inflecting. </li><li>Energy is bottoming – still a non-consensus view. </li><li>Pullback opportunity in metals &amp; mining.</li></ol></li></ul>

Economic data finally confirms what the charts have been saying all year: global growth in the major regions is now in sync.  We see the bullish advance in equities continuing well into 2018, a continuation of a long-term trend. However, the Sectors that propel this trend may be different.In our December International Strategy, we explore these and the following themes in further detail: Overweight Japan. Cyclicals continue to lead, defensive continues to lag. Actionable Sector/Group themes:Global banks are breaking out/bullishly inflecting. Energy is bottoming – still a non-consensus view. Pullback opportunity in metals &amp; mining.

International Equity Strategy: Bullish Big Picture

Norway

Equinor ASA operates as an energy company. The Company develops oil, gas, wind, and solar energy projects, as well as focuses on offshore operations and exploration services. Equinor serves customers worldwide.

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Equinor (EQNR NO)

Global E&Ps: South Africa in Focus

South Africa has limited historical oil and gas production, with current production of c.25 Kboe/day largely gas-focused for the Mossel Bay GTL...

Aaditya Chintalapati, CFA

Global Energy Shares Breaking Out; Technology Remains Attractive

The MSCI ACWI and S&P 500 have both achieved a higher high relative to mid-April prices, which we see as a potential early indication of a...

Vermilion Research

U.S. Equity Strategy: Opportunities in Energy Stocks

The recent successful test of support at the 200-day moving average has paved the way for a meaningful bounce higher on the S&P 500. Given this...

Vermilion Research

Global Equity Strategy: Overweight TOPIX, Hang Seng

Global markets are holding at support levels and we reiterate, our neutral but constructive outlook . In today’s report we highlight actionable...

Vermilion Research

International Equity Strategy: Bullish Big Picture

Economic data finally confirms what the charts have been saying all year: global growth in the major regions is now in sync. We see the bullish...

Vermilion Research

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