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

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

Muyuan Foodstuff Co Ltd A / Technical Analysis

<ul>
<li>A pullback in global equities is underway following steep uptrend violations on MSCI ACWI (ACWI-US) and EURO STOXX 50. Both are 4-5% off their highs; further downside may be limited.</li>
<li>Several 5%-10% pullbacks are to be expected in any given year, particularly after the historic 5-month rallies, so we view this as healthy and normal within the ongoing bull market.</li>
<li>ACWI-US is currently testing important support at $105; if this area were to break, next major supports are $102 and $99; this is where we would be buying.</li>
</ul>


A pullback in global equities is underway following steep uptrend violations on MSCI ACWI (ACWI-US) and EURO STOXX 50. Both are 4-5% off their highs; further downside may be limited.
Several 5%-10% pullbacks are to be expected in any given year, particularly after the historic 5-month rallies, so we view this as healthy and normal within the ongoing bull market.
ACWI-US is currently testing important support at $105; if this area were to break, next major supports are $102 and $99; this is where we would be buying.


Pullback Underway; Further Downside Limited?; Buys in Defensives and Commodity-Related Sectors

Korea Stock Exchange Kospi Index / Technical Analysis

<ul>
<li>Throughout 2024 we've discussed the theme of more global indexes/Sectors breaking out to new highs, the latest being the UK's FTSE 100, South Korea's KOSPI, and Norway's Oslo OBX.</li>
<li>This is classic bull market behavior. The long list of breakouts discussed throughout 2024 include the MSCI EM, ACWI, MSCI EAFE (in local currency), Israel, Germany, Sweden, France, and Ireland.</li>
<li>Another important thing to note is that none of these breakouts are failing; they all remain above their major breakout levels, a very bullish sign. We remain bullish.</li>
</ul>


Throughout 2024 we've discussed the theme of more global indexes/Sectors breaking out to new highs, the latest being the UK's FTSE 100, South Korea's KOSPI, and Norway's Oslo OBX.
This is classic bull market behavior. The long list of breakouts discussed throughout 2024 include the MSCI EM, ACWI, MSCI EAFE (in local currency), Israel, Germany, Sweden, France, and Ireland.
Another important thing to note is that none of these breakouts are failing; they all remain above their major breakout levels, a very bullish sign. We remain bullish.


More Countries Breaking Out; Bullish Outlook Intact; FTSE 100, KOSPI, and Oslo OBX Breaking Out

European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

The contest for <a href="https://www.smartkarma.com/entities/g4s-plc" target="_blank" data-smartkarma-citation="entities:21948:1" rel="noopener">G4S PLC (GFS LN)</a> will be settled by an unfrequent head-to-head auction if neither GardaWorld or Allied Universal has sent a revised (read knockout) offer before 5.00pm on Saturday 20 February and prevailed by then.
<ul>
<li>
The procedure provides for up to five days of public bidding over sequential business days, with February 22 set as the first day of the auction.
</li>
</ul>
The Telegraph reported that the City expected GardaWorld to return well above Allied Universal’s offer.
<ul>
<li>G4S is a scarce asset.</li>
<li>It is the world’s largest security company, with £7 bn annual turnover and 530,000 employees worldwide.</li>
<li>G4S is trading at higher multiples than <a href="https://www.smartkarma.com/entities/securitas-ab" target="_blank" data-smartkarma-citation="entities:22476:1" rel="noopener">Securitas AB (SECUB SS)</a>.</li>
</ul>
For either bidder, it would be a transformational deal, with some economies of scale and, above all, long-term contracts and relationships:
<ul>
<li>Allied Universal, California based, has annual revenues of about £6 bn and 250,000 employees.</li>
<li>GardaWorld, backed by BC Partners, has annual revenues of about £2 bn and 100,000 employees.</li>
</ul>
Revised bids could come in the region of 282p, valuing the equity of G4S at c. £4,361 mn. Bids could go even higher.
<ul>
<li>G4S shares are trading at 269p, as investors bet that improved offers are coming.</li>
<li>The gross spread to a 282p hypothetical revised offer is 4.6%.</li>
<li>
HOLD your breath if you've already got the trade on, go LONG if not, although the latter involves both second guessing the bidders and a maximum downside of c. 9% (using 269p vs. Allied's last offer).</li>
</ul>

The contest for G4S PLC (GFS LN) will be settled by an unfrequent head-to-head auction if neither GardaWorld or Allied Universal has sent a revised (read knockout) offer before 5.00pm on Saturday 20 February and prevailed by then.


The procedure provides for up to five days of public bidding over sequential business days, with February 22 set as the first day of the auction.


The Telegraph reported that the City expected GardaWorld to return well above Allied Universal’s offer.

G4S is a scarce asset.
It is the world’s largest security company, with £7 bn annual turnover and 530,000 employees worldwide.
G4S is trading at higher multiples than Securitas AB (SECUB SS).

For either bidder, it would be a transformational deal, with some economies of scale and, above all, long-term contracts and relationships:

Allied Universal, California based, has annual revenues of about £6 bn and 250,000 employees.
GardaWorld, backed by BC Partners, has annual revenues of about £2 bn and 100,000 employees.

Revised bids could come in the region of 282p, valuing the equity of G4S at c. £4,361 mn. Bids could go even higher.

G4S shares are trading at 269p, as investors bet that improved offers are coming.
The gross spread to a 282p hypothetical revised offer is 4.6%.

HOLD your breath if you've already got the trade on, go LONG if not, although the latter involves both second guessing the bidders and a maximum downside of c. 9% (using 269p vs. Allied's last offer).


YTD sideways congestion for the MSCI ACWI ex-US and an intact downtrend for the MSCI EM index continue to point to a risk-off environment for international equity markets, and supports our neutral outlook. We continue to recommend avoiding broad indexed exposure in favor of selectivity. In today’s report we highlight actionable country- and Sector-specific themes within Norway, India, Japan and Australia.

YTD sideways congestion for the MSCI ACWI ex-US and an intact downtrend for the MSCI EM index continue to point to a risk-off environment for international equity markets, and supports our neutral outlook. We continue to recommend avoiding broad indexed exposure in favor of selectivity. In today’s report we highlight actionable country- and Sector-specific themes within Norway, India, Japan and Australia.

Global Ex-U.S. & EM Continue to Point to Risk-Off Environment

Sweden

Securitas AB sells products and services for the protection of homes, work places, and community. The Company's services include specialized guarding and mobile services, monitoring, and consulting and investigations. Securitas operates in Europe, North and South America, the Middle East, and Asia.

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Securitas AB (SECUB SS)

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

More Countries Breaking Out; Bullish Outlook Intact; FTSE 100, KOSPI, and Oslo OBX Breaking Out

Bullish Outlook Intact; More Countries Breaking Out, including UK's FTSE 100, South Korea's KOSPI, and Norway's Oslo OBX; Buys in global...

Vermilion Research

G4S Heading for Takeover Panel Auction

Market bets on improved offers, which could come c. 282p (gross spread 4.6%) or higher. HOLD your breath if you have the position, LONG if not...

Jesus Rodriguez Aguilar

Global Ex-U.S. & EM Continue to Point to Risk-Off Environment

YTD sideways congestion for the MSCI ACWI ex-US and an intact downtrend for the MSCI EM index continue to point to a risk-off environment for...

Vermilion Research

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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

Pullback Underway; Further Downside Limited?; Buys in Defensives and Commodity-Related Sectors

Pullback Underway; Further Downside Limited?; Commodities Testing Resistance; Buys in Global Defensives (Staples, Utilities, Telecomm), Commodity...

Vermilion Research

More Countries Breaking Out; Bullish Outlook Intact; FTSE 100, KOSPI, and Oslo OBX Breaking Out

Bullish Outlook Intact; More Countries Breaking Out, including UK's FTSE 100, South Korea's KOSPI, and Norway's Oslo OBX; Buys in global...

Vermilion Research

G4S Heading for Takeover Panel Auction

Market bets on improved offers, which could come c. 282p (gross spread 4.6%) or higher. HOLD your breath if you have the position, LONG if not...

Jesus Rodriguez Aguilar

Global Ex-U.S. & EM Continue to Point to Risk-Off Environment

YTD sideways congestion for the MSCI ACWI ex-US and an intact downtrend for the MSCI EM index continue to point to a risk-off environment for...

Vermilion Research