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

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>The review period for the <a href="https://www.smartkarma.com/entities/nikkei-225" target="_blank" data-smartkarma-citation="entities:22909:1" rel="noopener">Nikkei 225 (NKY INDEX)</a> March rebalance ends yesterday. There could be three changes at the rebalance with sector balance in focus.</li>
<li>Depending on the changes, passive trackers will need to buy between 1.3-19x ADV (7.1-24% of real float) on the inclusions and sell between 3.5-47x ADV on the deletions.</li>
<li>
<a href="https://www.smartkarma.com/entities/fast-retailing-co-ltd" target="_blank" data-smartkarma-citation="entities:751:1" rel="noopener">Fast Retailing (9983 JP)</a> avoids capping in March, passives will buy <a href="https://www.smartkarma.com/entities/nitori-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:20386:1" rel="noopener">Nitori Holdings (9843 JP)</a>, and 25 stocks have over 0.5x ADV to sell as part of the funding trade.</li>
</ul>


The review period for the Nikkei 225 (NKY INDEX) March rebalance ends yesterday. There could be three changes at the rebalance with sector balance in focus.
Depending on the changes, passive trackers will need to buy between 1.3-19x ADV (7.1-24% of real float) on the inclusions and sell between 3.5-47x ADV on the deletions.

Fast Retailing (9983 JP) avoids capping in March, passives will buy Nitori Holdings (9843 JP), and 25 stocks have over 0.5x ADV to sell as part of the funding trade.


Nikkei 225 Index Rebalance Preview (Mar 2024): Update on Ranking, Capping, Funding & Fast Retailing

<ul>
<li>The review period for a global index and a bunch of local indices ended last week. The announcement of the changes will be made in 1 week to 4 weeks.</li>
<li>
<a href="https://www.smartkarma.com/entities/strike-energy-ltd" target="_blank" data-smartkarma-citation="entities:12473:1" rel="noopener">Strike Energy (STX AU)</a> will replace <a href="https://www.smartkarma.com/entities/costa-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:22632:1" rel="noopener">Costa Group Holdings (CGC AU)</a> in the <a href="https://www.smartkarma.com/entities/s-p-asx-200" target="_blank" data-smartkarma-citation="entities:22901:1" rel="noopener">S&amp;P/ASX 200 (AS51 INDEX)</a> at the close on 8 February.</li>
<li>The inflows to mainland China ETFs continue for another week. There were big inflows to <a href="https://www.smartkarma.com/entities/ishares-msci-india-etf" target="_blank" data-smartkarma-citation="entities:282:1" rel="noopener">iShares India ETF (INDA US)</a> and <a href="https://www.smartkarma.com/entities/ishares-msci-india-small-cap" target="_blank" data-smartkarma-citation="entities:32064:1" rel="noopener">Ishares India Small-Cap (SMIN US)</a>. </li>
</ul>


The review period for a global index and a bunch of local indices ended last week. The announcement of the changes will be made in 1 week to 4 weeks.

Strike Energy (STX AU) will replace Costa Group Holdings (CGC AU) in the S&amp;P/ASX 200 (AS51 INDEX) at the close on 8 February.
The inflows to mainland China ETFs continue for another week. There were big inflows to iShares India ETF (INDA US) and Ishares India Small-Cap (SMIN US). 


Index Rebalance & ETF Flow Recap: N225, ASX, STAR50, NIFTY50, KRX New Deal, UOL SP, Korea Passive

Japan Specialist

Mark Chadwick

Thematic (Sector/Industry)

<ul>
<li>OVERSEAS. SPX +0.7% with all sectors in the green ahead of expected soft CPI print on Wed; Oil strong with weaker USD; MSFT wins as Activision purchase progresses</li>
<li>JAPAN. NKY Futures +0.4% vs Cash; USDJPY 140.3; Markets start coalesing around BOJ policy shift; TSE kicks out 48 companies from Prime listing; Big Earnings Beat from Lawson(2651)</li>
<li>NUGGET. Building a global semi-supply chain is a central tenet of Japan's industrial policy. We think focusing on short term cyclical semi-weakness risks missing out on the home runs</li>
</ul>


OVERSEAS. SPX +0.7% with all sectors in the green ahead of expected soft CPI print on Wed; Oil strong with weaker USD; MSFT wins as Activision purchase progresses
JAPAN. NKY Futures +0.4% vs Cash; USDJPY 140.3; Markets start coalesing around BOJ policy shift; TSE kicks out 48 companies from Prime listing; Big Earnings Beat from Lawson(2651)
NUGGET. Building a global semi-supply chain is a central tenet of Japan's industrial policy. We think focusing on short term cyclical semi-weakness risks missing out on the home runs


Ohayo Japan|Equities Bid Ahead of CPI Print; NUGGET:China Semi Derisking - The Winner Is…Yes, Japan!

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

<ul>
<li>Large portion of the business is in secular decline and facing pricing pressure</li>
<li>
<a href="https://www.smartkarma.com/entities/ricoh-company-ltd" target="_blank" data-smartkarma-citation="entities:15359:1" rel="noopener">Ricoh Company Ltd (7752 JP)</a> appears to be losing share in a shrinking market</li>
<li>Estimates are above overly optimistic guidance making shares look optically inexpensive</li>
</ul>


Large portion of the business is in secular decline and facing pricing pressure

Ricoh Company Ltd (7752 JP) appears to be losing share in a shrinking market
Estimates are above overly optimistic guidance making shares look optically inexpensive


Ricoh (7752 JP) - Long Term Structural Decliner with a Recent Boost in Inorganic Rev & Profits

Japan

Seiko Epson Corporation manufactures communications equipment, electronic devices, and precision products.  The Company's products include printers, scanners, Liquid Crystal Projectors, semiconductors, quartz devices, and watches.

Seiko Epson (6724 JP)

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

Nikkei 225 Index Rebalance Preview (Mar 2024): Update on Ranking, Capping, Funding & Fast Retailing

The stocks have moved a fair bit in the last couple of weeks. The expected deletes are getting sold while the potential adds have moved higher. The...

Brian Freitas

Index Rebalance & ETF Flow Recap: N225, ASX, STAR50, NIFTY50, KRX New Deal, UOL SP, Korea Passive

This recap highlights Insights covering Asian index rebalances (announcements/ forecasts/ IPO Fast Entry/ M&A driven changes). We also highlight...

Brian Freitas

Ohayo Japan|Equities Bid Ahead of CPI Print; NUGGET:China Semi Derisking - The Winner Is…Yes, Japan!

SPX bid ahead of CPI as soft landing narrarive dominates; NKY Futures +0.4% vs Cash; USDJPY 140.3; Markets start coalesing around BOJ policy shift;...

Mark Chadwick

Ricoh (7752 JP) - Long Term Structural Decliner with a Recent Boost in Inorganic Rev & Profits

A large portion of Ricoh's business is losing market share in an industry that is facing secular declines. Estimates that above optimistic...

Robert C Prather Jr