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

Communication Services Select Sector SPDR Fund / Technical Analysis

Communication Services Select Sector SPDR Fund

<ul>
<li>In our January 10th Compass, we discussed a break above 3910 on SPX would signal a tradable rally, with 4100-4165 our target, the top-end of our expected 2023 trading range.</li>
<li>We believe equities are still in the midst of a rally/short squeeze, but that the rally is likely to fizzle in the 4100-4165 area.</li>
<li>After being underweight Communications (XLC) since Nov 2021, sidestepping 20% underperformance vs. SPX, we now see signs of price and RS bottoms, and we are upgrading to market weight. Buy.</li>
</ul>


In our January 10th Compass, we discussed a break above 3910 on SPX would signal a tradable rally, with 4100-4165 our target, the top-end of our expected 2023 trading range.
We believe equities are still in the midst of a rally/short squeeze, but that the rally is likely to fizzle in the 4100-4165 area.
After being underweight Communications (XLC) since Nov 2021, sidestepping 20% underperformance vs. SPX, we now see signs of price and RS bottoms, and we are upgrading to market weight. Buy.


Upgrading Communications, Downgrading Staples - Both to Market Weight; US Dollar Major Top

iShares MSCI ACWI ex US ETF / Technical Analysis

<ul>
<li>The bear market rally we have discussed since our Sept. 29 Int'l Compass has managed to surpass our price targets, which were the YTD downtrends on the ACWX-US and EFA-US.</li>
<li>As you will see below, many countries are reversing topside their 6.5-month to YTD downtrends.</li>
<li>As a result of these bullish reversals and breakdowns on the US dollar (DXY) and 10-year Treasury yield, we are upgrading our outlook to neutral. Buy on pullbacks.</li>
</ul>


The bear market rally we have discussed since our Sept. 29 Int'l Compass has managed to surpass our price targets, which were the YTD downtrends on the ACWX-US and EFA-US.
As you will see below, many countries are reversing topside their 6.5-month to YTD downtrends.
As a result of these bullish reversals and breakdowns on the US dollar (DXY) and 10-year Treasury yield, we are upgrading our outlook to neutral. Buy on pullbacks.


Positive Character Changes; MSCI ACWI Ex-US, EAFE, STOXX 50, Countless Others Reversing Downtrends

<ul>
<li>The DAX and Hang Seng are reversing their downtrends while MSCI China (MCHI-US) and China Internet (KWEB-US) are currently testing their respective multi-month downtrends.</li>
<li>Reversals of these downtrends would signal a bear market rally in progress.</li>
<li>We will need to see more basing, followed by base breakouts, in order to get bullish -- a process that would likely take weeks or months.</li>
</ul>


The DAX and Hang Seng are reversing their downtrends while MSCI China (MCHI-US) and China Internet (KWEB-US) are currently testing their respective multi-month downtrends.
Reversals of these downtrends would signal a bear market rally in progress.
We will need to see more basing, followed by base breakouts, in order to get bullish -- a process that would likely take weeks or months.


Still Bearish, But On Watch for Bear Market Rally; Buying Toshiba 6502-JP, Defensive Sectors

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Event-Driven

<p>Softbank stock closed up 14.5% today vs. the close on Monday as the market reacted positively to its sale of TMUS shares to Deutsche Telekom. At one point the stock was up as much as 21.5% over two days. Such a large move seems unwarranted given the news, while positive, was not especially impactful. Is this simply a short squeeze given the continuous selling of the stock since May or is the market now expecting more buybacks?</p>

Softbank stock closed up 14.5% today vs. the close on Monday as the market reacted positively to its sale of TMUS shares to Deutsche Telekom. At one point the stock was up as much as 21.5% over two days. Such a large move seems unwarranted given the news, while positive, was not especially impactful. Is this simply a short squeeze given the continuous selling of the stock since May or is the market now expecting more buybacks?

Softbank – Still No Buyback Means Still Little Reason to Buy

Telco/Internet specialist

Kirk Boodry

Redex Research

Equity Bottom-Up

<p>Softbank and DT have restructured their June 2020 agreement on the sale of TMUS shares resulting in a similar value for Softbank’s TMUS stake but better optionality on the equity albeit with lower cash proceeds. That doesn’t justify a 10% move in Softbank shares today but with cash coming in markets may see this as a precursor to a buyback announcement. Alternatively, there has been such a lack of good news this quarter that any positive developments may be enough to generate some excitement. It was enough to narrow the discount from 47% to 41%, a level last seen in June but it may struggle to hold that level unless more good news follows.    </p>

Softbank and DT have restructured their June 2020 agreement on the sale of TMUS shares resulting in a similar value for Softbank’s TMUS stake but better optionality on the equity albeit with lower cash proceeds. That doesn’t justify a 10% move in Softbank shares today but with cash coming in markets may see this as a precursor to a buyback announcement. Alternatively, there has been such a lack of good news this quarter that any positive developments may be enough to generate some excitement. It was enough to narrow the discount from 47% to 41%, a level last seen in June but it may struggle to hold that level unless more good news follows.    

Softbank Group - DT Call Option Adjustment Includes Strategic Partnership but Less Cash

Germany

Deutsche Telekom AG offers telecommunications services.  The Company offers a full range of fixed-line telephone services, mobile communications services, Internet access, and combined information technology and telecommunications services for businesses.

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Deutsche Telekom (DTE GR)

Upgrading Communications, Downgrading Staples - Both to Market Weight; US Dollar Major Top

We believe equities are still in the midst of a rally/short squeeze, but that the rally is likely to fizzle in the $SPX 4100-4165 area. Upgrading...

Vermilion Research

Positive Character Changes; MSCI ACWI Ex-US, EAFE, STOXX 50, Countless Others Reversing Downtrends

MSCI ACWI ex-US $ACWX and EAFE $EFA reversing their YTD downtrends, with countless other countries doing the same. This is a clear character...

Vermilion Research

Still Bearish, But On Watch for Bear Market Rally; Buying Toshiba 6502-JP, Defensive Sectors

The $DAX and Hang Seng are reversing their downtrends while China $MCHI and China Internet $KWEB are currently testing their respective multi-month...

Vermilion Research

Softbank – Still No Buyback Means Still Little Reason to Buy

Softbank has surged on news of its TMUS stake sale to DT but is this simply a short squeeze given the continuous selling of the stock since May or...

Mio Kato

Softbank Group - DT Call Option Adjustment Includes Strategic Partnership but Less Cash

Softbank and DT have restructured an agreement on the sale of TMUS shares. That doesn’t justify the 10% move in Softbank shares but with cash...

Kirk Boodry

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