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

Despite the bulls still being in control, we have several ongoing concerns and we cannot rule out the potential for a pullback. Below we highlight developments that are inconsistent with a major bottom in equities that suggests the broad equity market is not yet out of the woods.  In fact, during today's action, the 2760 support level on the S&amp;P 500 briefly held but ultimately gave way. With the SPX holding below 2760 today, we are looking for downside targets of 2650 first, and then potentially 2470 if that fails to hold.

Despite the bulls still being in control, we have several ongoing concerns and we cannot rule out the potential for a pullback. Below we highlight developments that are inconsistent with a major bottom in equities that suggests the broad equity market is not yet out of the woods.  In fact, during today's action, the 2760 support level on the S&amp;P 500 briefly held but ultimately gave way. With the SPX holding below 2760 today, we are looking for downside targets of 2650 first, and then potentially 2470 if that fails to hold.

U.S. Equity Strategy: Several Indicators Suggest a Pullback Likely

Continued encouraging COVID-19 news and accommodative moves by the Fed have allowed the bulls to remain in control while short-term support on the S&amp;P 500 held near 2,450. While the bulls remain in control in the short-term, we continue to believe the broad equity market is not yet out of the woods and remains vulnerable -- particularly as Wall Street sentiment has flipped bullish. In today’s report we highlight attractive stocks from a relative strength perspective across Sectors.

Continued encouraging COVID-19 news and accommodative moves by the Fed have allowed the bulls to remain in control while short-term support on the S&amp;P 500 held near 2,450. While the bulls remain in control in the short-term, we continue to believe the broad equity market is not yet out of the woods and remains vulnerable -- particularly as Wall Street sentiment has flipped bullish. In today’s report we highlight attractive stocks from a relative strength perspective across Sectors.

U.S. Equity Strategy: Bulls Still In Driver’s Seat, But For How Long?

Leading International Investment Research, Edison Investment Research

Edison Investment Research

Leading International Investment Research

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisors and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.

Equity Bottom-Up

Wheaton Precious Metals / Equity Bottom-Up

On 1 April, Wheaton Precious Metals (WPM) announced that all of its partners’ mines are operational, with the exception of Voisey’s Bay, Constancia, Yauliyacu and Penasquito. Voisey’s Bay is not scheduled to deliver cobalt to WPM until FY21, so its temporary furlough will make no difference to FY20 estimates. However, other mines at risk of temporary closure include San Dimas and Los Filos in Mexico. As a result, WPM has withdrawn its production guidance for FY20. However, assuming these mines remain closed throughout Q220, but at higher prevailing metals prices (see Exhibit 1, overleaf), our FY20 EPS forecast for WPM has increased by 18.6%.

On 1 April, Wheaton Precious Metals (WPM) announced that all of its partners’ mines are operational, with the exception of Voisey’s Bay, Constancia, Yauliyacu and Penasquito. Voisey’s Bay is not scheduled to deliver cobalt to WPM until FY21, so its temporary furlough will make no difference to FY20 estimates. However, other mines at risk of temporary closure include San Dimas and Los Filos in Mexico. As a result, WPM has withdrawn its production guidance for FY20. However, assuming these mines remain closed throughout Q220, but at higher prevailing metals prices (see Exhibit 1, overleaf), our FY20 EPS forecast for WPM has increased by 18.6%.

Wheaton Precious Metals  - Swings and roundabouts

Attributable production of gold at Wheaton Precious Metals (WPM) reached a record in FY19, breaching the 400koz level for the first time ever. Record production begat record sales, although sales struggled to keep pace with production and, as a result, there was a slightly uncharacteristic (for the fourth quarter) increase in the number of ounces of metal produced but not yet delivered to WPM from its underlying streaming assets. From a financial perspective however, underlying net earnings during the quarter were within US$1m of our prior forecasts, auguring well for FY20 in terms of both EPS and DPS.

Attributable production of gold at Wheaton Precious Metals (WPM) reached a record in FY19, breaching the 400koz level for the first time ever. Record production begat record sales, although sales struggled to keep pace with production and, as a result, there was a slightly uncharacteristic (for the fourth quarter) increase in the number of ounces of metal produced but not yet delivered to WPM from its underlying streaming assets. From a financial perspective however, underlying net earnings during the quarter were within US$1m of our prior forecasts, auguring well for FY20 in terms of both EPS and DPS.


Wheaton Precious Metals  - In the right place at the right time

We continue to see increasingly more reasons to be bullish than not, and we believe the path of least resistance is higher for US equities. We also continue to recommend a “buy the dip” strategy. In this report we outline new developments, including more signs that the US dollar is rolling over, bullish developments for gold &amp; gold miners, and major breakouts for the Consumer Discretionary Sector. We also highlight attractive Groups and stocks within Materials and Energy: Copper, Gold, South Africa, Silver, Platinum, and Oil &amp; Gas Equip./Svcs., Large-Cap.

We continue to see increasingly more reasons to be bullish than not, and we believe the path of least resistance is higher for US equities. We also continue to recommend a “buy the dip” strategy. In this report we outline new developments, including more signs that the US dollar is rolling over, bullish developments for gold &amp; gold miners, and major breakouts for the Consumer Discretionary Sector. We also highlight attractive Groups and stocks within Materials and Energy: Copper, Gold, South Africa, Silver, Platinum, and Oil &amp; Gas Equip./Svcs., Large-Cap.

Weakening Dollar, Strengthening Commodities

Brazil

Wheaton Precious Metals Corp. operates as a precious metals streaming company. The Company focuses on gold and silver projects. Wheaton Precious Metals serves customers worldwide.

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Wheaton Precious Metals (WPM CN)

U.S. Equity Strategy: Several Indicators Suggest a Pullback Likely

Despite the bulls still being in control, we have several ongoing concerns and we cannot rule out the potential for a pullback. Below we highlight...

Vermilion Research

U.S. Equity Strategy: Bulls Still In Driver’s Seat, But For How Long?

Continued encouraging COVID-19 news and accommodative moves by the Fed have allowed the bulls to remain in control while short-term support on the...

Vermilion Research

Wheaton Precious Metals - Swings and roundabouts

On 1 April, Wheaton Precious Metals (WPM) announced that all of its partners’ mines are operational, with the exception of Voisey’s Bay,...

Edison Investment Research

Wheaton Precious Metals - In the right place at the right time

Attributable production of gold at Wheaton Precious Metals (WPM) reached a record in FY19, breaching the 400koz level for the first time ever....

Edison Investment Research

Weakening Dollar, Strengthening Commodities

We continue to see increasingly more reasons to be bullish than not, and we believe the path of least resistance is higher for US equities. We also...

Vermilion Research

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