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>US cap-weighted Health Care (ETF: XLV-US) remains in a 4.5-month RS uptrend relative to the S&amp;P 500, and we have the Sector on watch for a potential upgrade to overweight.</li>
<li>The VanEck Pharmaceutical ETF (PPH-US) recently broke out topside a 9-month base and RS displays a bullish reversal. Zooming-out, we can see a 6+ year base breakout.</li>
<li>Buy: Eli Lilly (LLY-US), Astrazeneca (AZN-US), Novo Nordisk (NOVO.B-DK), Roche (ROG-CH), Bristol-Myers Squibb (BMY-US), Bayer AG (BAYN-DE), UCB S.A. (UCB-BE), Ipsen SA (IPN-FR), ONO Pharmaceutical (4528-JP), and Teva Pharmaceutical (TEVA-US)</li>
</ul>


US cap-weighted Health Care (ETF: XLV-US) remains in a 4.5-month RS uptrend relative to the S&amp;P 500, and we have the Sector on watch for a potential upgrade to overweight.
The VanEck Pharmaceutical ETF (PPH-US) recently broke out topside a 9-month base and RS displays a bullish reversal. Zooming-out, we can see a 6+ year base breakout.
Buy: Eli Lilly (LLY-US), Astrazeneca (AZN-US), Novo Nordisk (NOVO.B-DK), Roche (ROG-CH), Bristol-Myers Squibb (BMY-US), Bayer AG (BAYN-DE), UCB S.A. (UCB-BE), Ipsen SA (IPN-FR), ONO Pharmaceutical (4528-JP), and Teva Pharmaceutical (TEVA-US)


Buy Global LargeCap Pharma: LLY, AZN, NOVO.B-DK, ROG-CH, BMY, BAYN-DE, UCB-BE, IPN-FR, 4528-JP, TEVA

European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<ul>
<li>Mid-July saw aggregate dispersion widen across Europe’s liquid dual-class universe. Median and mean became more negative as widening in Media-for-Europe and Grifols outweighed convergence across several structurally wide positive-premium pairs.</li>
<li>Convergence nevertheless remained broad beneath the headline statistics. Handelsbanken, Schindler, Henkel, Fuchs, Sixt and Carlsberg all tightened, reinforcing the episodic rather than linear character of ordinary/preference-share relative value.</li>
<li>BMW exits the universe following the conversion of all preferreds into ordinary shares and termination of preferred-share trading, marking the second major capital-structure resolution in consecutive months after Telecom Italia.</li>
</ul>


Mid-July saw aggregate dispersion widen across Europe’s liquid dual-class universe. Median and mean became more negative as widening in Media-for-Europe and Grifols outweighed convergence across several structurally wide positive-premium pairs.
Convergence nevertheless remained broad beneath the headline statistics. Handelsbanken, Schindler, Henkel, Fuchs, Sixt and Carlsberg all tightened, reinforcing the episodic rather than linear character of ordinary/preference-share relative value.
BMW exits the universe following the conversion of all preferreds into ordinary shares and termination of preferred-share trading, marking the second major capital-structure resolution in consecutive months after Telecom Italia.


Liquid Universe of European Ordinary and Preferred Shares: July '26 Report

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

Cross Asset Strategy

Over 50% of allocations are in the US with the bulk of the remainder split between Japan, China &amp; HK and the major European nations.  The EMEA overweight is comprised mainly of the UK, Netherlands, France and Germany, with active managers running underweights in the US, China &amp; HK, Australia and Japan.UK allocations hover around their lowest levels in history, though managers remain stubbornly overweight compared to the MSCI AC World index.  A total of 62% of managers are overweight the UK at an average +1.88% above benchmark.  Global Value investors are approaching their largest ever overweight in UK stocks of 3.64% above benchmark.Another month, another slump in Japan exposure.  Average weights in Japan stand at an all-time low of 5.06% with 85.5% of funds exposed (another low). <a href="https://www.smartkarma.com/entities/sony-corp" target="_blank" data-smartkarma-citation="entities:563:1" rel="noopener">Sony Corp (6758 JP)</a> and <a href="https://www.smartkarma.com/entities/kddi-corp" target="_blank" data-smartkarma-citation="entities:639:1" rel="noopener">KDDI Corp (9433 JP)</a> are the most widely held stocks, with 23% and 21% of funds holding a position.Tech exposure is at record highs, though this is matched by a record underweight of -0.47%.  Indeed, the percentage of funds who are overweight technology has fallen to below 50% for the first time since the end of 2018, a sign that Global managers are tilting their portfolios away from Tech.German Industrials allocations have hit a 4-year high as more Global investors add exposure to the sector. <a href="https://www.smartkarma.com/entities/deutsche-post-ag" target="_blank" data-smartkarma-citation="entities:21608:1" rel="noopener">Deutsche Post AG (DPW GR)</a> and <a href="https://www.smartkarma.com/entities/siemens-ag" target="_blank" data-smartkarma-citation="entities:21713:1" rel="noopener">Siemens AG (SIE GR)</a> were the key stocks behind the move, with 4.2% and 2.4% of funds adding exposure over the last 6-months.Alibaba has seen closures by some of the larger holders in our analysis, led by American Funds Capital World Fund (-$1.1bn) and New Economy Fund (-$451m).  Though closures have dominated, selected funds have opened exposure during this period of volatility, including Invesco's Global Focus Fund and Liontrust's Global Income Fund.

Over 50% of allocations are in the US with the bulk of the remainder split between Japan, China &amp; HK and the major European nations.  The EMEA overweight is comprised mainly of the UK, Netherlands, France and Germany, with active managers running underweights in the US, China &amp; HK, Australia and Japan.UK allocations hover around their lowest levels in history, though managers remain stubbornly overweight compared to the MSCI AC World index.  A total of 62% of managers are overweight the UK at an average +1.88% above benchmark.  Global Value investors are approaching their largest ever overweight in UK stocks of 3.64% above benchmark.Another month, another slump in Japan exposure.  Average weights in Japan stand at an all-time low of 5.06% with 85.5% of funds exposed (another low). Sony Corp (6758 JP) and KDDI Corp (9433 JP) are the most widely held stocks, with 23% and 21% of funds holding a position.Tech exposure is at record highs, though this is matched by a record underweight of -0.47%.  Indeed, the percentage of funds who are overweight technology has fallen to below 50% for the first time since the end of 2018, a sign that Global managers are tilting their portfolios away from Tech.German Industrials allocations have hit a 4-year high as more Global investors add exposure to the sector. Deutsche Post AG (DPW GR) and Siemens AG (SIE GR) were the key stocks behind the move, with 4.2% and 2.4% of funds adding exposure over the last 6-months.Alibaba has seen closures by some of the larger holders in our analysis, led by American Funds Capital World Fund (-$1.1bn) and New Economy Fund (-$451m).  Though closures have dominated, selected funds have opened exposure during this period of volatility, including Invesco's Global Focus Fund and Liontrust's Global Income Fund.

Global Fund Positioning Update:  Japan Lows, US Highs, UK Value Rotation, Tencent & Alibaba Exit

Wisdomtree Japan Hedged Eq / Technical Analysis

Market dynamics continue to send mixed signals, but the bottom line is that not one MSCI ACWI Sector is breaking down, and important price support levels are holding in the US, Europe, and Japan. Additionally, the MSCI ACWI, ACWI ex-US, and EAFE indexes all remain above critical support levels. Until supports start to break we cannot be bearish. It is also worth noting that various indicators could be making a turn for the better, including early signs of interest rates bottoming in the US and Germany, a potential false breakdown in crude oil, and high yield spreads leveling-out.

Market dynamics continue to send mixed signals, but the bottom line is that not one MSCI ACWI Sector is breaking down, and important price support levels are holding in the US, Europe, and Japan. Additionally, the MSCI ACWI, ACWI ex-US, and EAFE indexes all remain above critical support levels. Until supports start to break we cannot be bearish. It is also worth noting that various indicators could be making a turn for the better, including early signs of interest rates bottoming in the US and Germany, a potential false breakdown in crude oil, and high yield spreads leveling-out.

Critical Supports Holding in the US, Europe, & Japan; Buying Health Care, Utilities, Materials, Tech

The Hang Seng, EURO STOXX 50, MSCI ACWI ex-US, and MSCI EAFE display bearish short-term inflections. Additionally, 10-year yields in the US and Germany are breaking down below key support. These deteriorating market dynamics raise concerns of a deeper pullback, however other indicators remain largely positive. As a result, we continue to see a mixed, but overall constructive market. Actionable themes highlighted in today's report include Health Care and Real Estate.

The Hang Seng, EURO STOXX 50, MSCI ACWI ex-US, and MSCI EAFE display bearish short-term inflections. Additionally, 10-year yields in the US and Germany are breaking down below key support. These deteriorating market dynamics raise concerns of a deeper pullback, however other indicators remain largely positive. As a result, we continue to see a mixed, but overall constructive market. Actionable themes highlighted in today's report include Health Care and Real Estate.

Global Equity Strategy: Mixed Market Environment Continues As Yields Break Down

United States

Roche Holding AG develops and manufactures pharmaceutical and diagnostic products. The Company produces prescription drugs in the areas of cardiovascular, infectious, autoimmune, respiratory diseases, dermatology, metabolic disorders, oncology, transplantation, and the central nervous system. Roche Holding serves customers worldwide.

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Roche Holding (ROG SW)

Buy Global LargeCap Pharma: LLY, AZN, NOVO.B-DK, ROG-CH, BMY, BAYN-DE, UCB-BE, IPN-FR, 4528-JP, TEVA

The VanEck Pharmaceutical ETF $PPH recently broke out topside a 9-month base and RS displays a bullish reversal. Zooming-out, we can see a 6+ year...

Vermilion Research

Liquid Universe of European Ordinary and Preferred Shares: July '26 Report

-July widened dispersion across Europe’s dual-class universe, yet selective convergence persisted beneath the surface. Structural anomalies...

Jesus Rodriguez Aguilar

Global Fund Positioning Update: Japan Lows, US Highs, UK Value Rotation, Tencent & Alibaba Exit

A detailed look at investor positioning among 380 active Global strategies, covering the major themes in country, sector and stock exposure.

Steven Holden

Critical Supports Holding in the US, Europe, & Japan; Buying Health Care, Utilities, Materials, Tech

Various indicators are making a turn for the better, including early signs of interest rates bottoming in the US and Germany, a false breakdown in...

Vermilion Research

Global Equity Strategy: Mixed Market Environment Continues As Yields Break Down

The Hang Seng, EURO STOXX 50, MSCI ACWI ex-US, and MSCI EAFE display bearish short-term inflections and 10-year yields in the US and Germany are...

Vermilion Research

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