Chart based progressive global trading strategies, Chart Partners

Thomas Schroeder

Chart based progressive global trading strategies

Chart Partners

Chart Partners objective is to discover medium-term cycle turns and profit opportunities before they unfold, within structural trends while preserving capital with clear degrees of risk. We have real return ideas. 

Markets are dynamic and trading systems must reflect this. It is crucial to determine underlying correlations and lead-lag relationships within global markets and the impact on linked instruments. Our weekly Chartonics product gives you short-term trading strategies that can be applied within the medium and longer term macro trends that are mapped out in our strategy updates. 

Our methodology fuses global market variables and isolates drivers in trends. We specialize in FX, index trade in NY and Asia with a focus on Asian stocks. 

Technical Analysis

ChartonicsEurope is the underperform short bet but our EM outperform hit a road block as copper turned down hard (sold down long exposure on March 23/24). This makes the US the ST performer but within the US we like shorting weaker sectors like small caps into rally attempts this week under the assumption transports and DJI are capped at previously mentioned pivot resistance points (8,200 and 17,700).Expect a US internal grind associated with rotation and distribution as our bull to bear cycle transition unfolds.Brent and copper bull momentum is fading. Use fresh rally attempts to short within a grinding top formation.DXY 94 is ideal buy support if re tested. Bullish wedge formation unfolding. EM FX showing clearer cracks. We are re calibrating USD buy levels.CAD and AUD are prone to a final bout of strength as oil attempts to recover. Preferred USD buy zone are CAD 1.2850 and AUD 0.7770 but these levels are currently miles away (will re measure).EEM 34.00-50 is our sell zone with risk to 35. We recommended buying puts at EEM 33.40. Weakening buy volumes, mature rally cycle, firming USD, weaker commodities and DM fallout risk are all leaning on forward EM trade.Turkey short from 80k needs work/adjusting. Russia short zone at RTS 900 if we can muster an oil uptick above Brent 42. Brazil came just shy of our 52k short level. USD/BRL looks bullish.Asia longs: India but looking for a stall/exit, H shares reduced by half at 8,800. Long A shares (2823.HK at 9.70). Exited BHP and CNOOC. Taiwan due to reverse to bearish under our 9,000 target. Bias for long Korea/short Nikkei.Asia shorts: Short Nikkei at 17,200. Thailand short from 1,360. Malaysia 1,700 short turning our way. Next in line is to short Sing banks (DBS 16 short level hit). Taiwan on our short radar near 9,000.Cycle dates: We are entering a more vulnerable cycle time line with risk of final rally brush strokes on recent tops in the US and select EM’s with Europe acting as dead weight.

ChartonicsEurope is the underperform short bet but our EM outperform hit a road block as copper turned down hard (sold down long exposure on March 23/24). This makes the US the ST performer but within the US we like shorting weaker sectors like small caps into rally attempts this week under the assumption transports and DJI are capped at previously mentioned pivot resistance points (8,200 and 17,700).Expect a US internal grind associated with rotation and distribution as our bull to bear cycle transition unfolds.Brent and copper bull momentum is fading. Use fresh rally attempts to short within a grinding top formation.DXY 94 is ideal buy support if re tested. Bullish wedge formation unfolding. EM FX showing clearer cracks. We are re calibrating USD buy levels.CAD and AUD are prone to a final bout of strength as oil attempts to recover. Preferred USD buy zone are CAD 1.2850 and AUD 0.7770 but these levels are currently miles away (will re measure).EEM 34.00-50 is our sell zone with risk to 35. We recommended buying puts at EEM 33.40. Weakening buy volumes, mature rally cycle, firming USD, weaker commodities and DM fallout risk are all leaning on forward EM trade.Turkey short from 80k needs work/adjusting. Russia short zone at RTS 900 if we can muster an oil uptick above Brent 42. Brazil came just shy of our 52k short level. USD/BRL looks bullish.Asia longs: India but looking for a stall/exit, H shares reduced by half at 8,800. Long A shares (2823.HK at 9.70). Exited BHP and CNOOC. Taiwan due to reverse to bearish under our 9,000 target. Bias for long Korea/short Nikkei.Asia shorts: Short Nikkei at 17,200. Thailand short from 1,360. Malaysia 1,700 short turning our way. Next in line is to short Sing banks (DBS 16 short level hit). Taiwan on our short radar near 9,000.Cycle dates: We are entering a more vulnerable cycle time line with risk of final rally brush strokes on recent tops in the US and select EM’s with Europe acting as dead weight.

Leading Independent Investment Research, Morningstar, Inc.

Morningstar

Leading Independent Investment Research

Morningstar, Inc.

Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. We offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors. 

Morningstar provides data on more than 500,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 16 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries, with more than $180 billion in assets under advisement or management as of June 30, 2015. We have operations in 27 countries.

Download the Morningstar Fact Sheet : http://corporate.morningstar.com/US/documents/MarketingFactSheets/AboutMorningstarFactsheet.pdf

Thematic (Sector/Industry)

<ul><li class="p1">Pipeline innovation outpacing patent losses represents a core element of the wide moat ratings for most of the Big Pharma firms.</li><li class="p1">Slowing patent losses over the next five years should accelerate the growth rates of the Big Pharma firms and increase the returns on invested capital as new pipeline drugs launch.</li><li class="p1">Overall, we view the Big Pharma group as moderately undervalued and we are more bullish than 2020 consensus estimates on the pipelines for Bristol ($2 billion above), Merck ($3 billion above) and Sanofi ($1 billion above) and view these stocks as undervalued</li></ul>Key Takeaways:<ul><li class="p1">Top scoring Sanofi looks both undervalued and well-positioned based on a top-tier pipeline, robust growth from currently marketed products, and minimal patent losses during the next five years. Sanofi&rsquo;s steadily growing rare disease, consumer, vaccine, and animal health segments combined with an improving late-stage and mid-stage pipeline, led by the recent approval of Praluent, more than offset limited generic competition to long-acting insulin Lantus. (See page 4 for complete ranking).</li><li class="p1">Adjusting for total size, Bristol scores at the top of the group and looks undervalued, largely driven by a powerful entrenchment in immuno-oncology that sets up industry-leading growth. Bristol&rsquo;s likely first-mover advantage in several cancer indications with Opdivo along with multiple combination cancer assets in early-stage development should lead to Bristol gaining over a third of the $30+ billion immuno-oncology market by 2022.</li><li class="p1">With the lowest overall score, AstraZeneca&rsquo;s growth outlook is weighed down by several patent losses. Despite the poor outlook, we believe AstraZeneca looks fairly valued and holds several underappreciated early pipeline assets, including AZD1775 (WEE-1 for cancer) and AZD3293 and MEDI1814 (Alzheimer&rsquo;s).</li><li class="p1">Lingering patent losses following the patent cliff peak in 2012 have finally worked through the system, and Big Pharma&rsquo;s five-year generics exposure looks the lowest since before 2010. The group&rsquo;s outlook for growth is improving as we see declines annualize for several blockbusters including Nexium, Abilify, Cymbalta, Evista, Diovan, and Celebrex.</li><li class="p1">In aggregate, we view the Big Pharma industry as 7% undervalued, largely driven by overly pessimistic pipeline expectations. Relative to consensus, we are projecting higher sales for several early stage drug candidates as well as approved drugs with expanding indications, including immuno-oncology drugs Opdivo (Bristol) and Keytruda (Merck), women&rsquo;s health drug Elagolix (AbbVie), and staph vaccine SA4Ag (Pfizer). See page 3 for a complete list of underappreciated Big Pharma drugs. Additionally, on page 3, we highlight the largest potential drugs that have very low awareness from the investment community.</li></ul>Analysts: Damien Conover CFA &amp; Sonia Vora

Pipeline innovation outpacing patent losses represents a core element of the wide moat ratings for most of the Big Pharma firms.Slowing patent losses over the next five years should accelerate the growth rates of the Big Pharma firms and increase the returns on invested capital as new pipeline drugs launch.Overall, we view the Big Pharma group as moderately undervalued and we are more bullish than 2020 consensus estimates on the pipelines for Bristol ($2 billion above), Merck ($3 billion above) and Sanofi ($1 billion above) and view these stocks as undervaluedKey Takeaways:Top scoring Sanofi looks both undervalued and well-positioned based on a top-tier pipeline, robust growth from currently marketed products, and minimal patent losses during the next five years. Sanofi&rsquo;s steadily growing rare disease, consumer, vaccine, and animal health segments combined with an improving late-stage and mid-stage pipeline, led by the recent approval of Praluent, more than offset limited generic competition to long-acting insulin Lantus. (See page 4 for complete ranking).Adjusting for total size, Bristol scores at the top of the group and looks undervalued, largely driven by a powerful entrenchment in immuno-oncology that sets up industry-leading growth. Bristol&rsquo;s likely first-mover advantage in several cancer indications with Opdivo along with multiple combination cancer assets in early-stage development should lead to Bristol gaining over a third of the $30+ billion immuno-oncology market by 2022.With the lowest overall score, AstraZeneca&rsquo;s growth outlook is weighed down by several patent losses. Despite the poor outlook, we believe AstraZeneca looks fairly valued and holds several underappreciated early pipeline assets, including AZD1775 (WEE-1 for cancer) and AZD3293 and MEDI1814 (Alzheimer&rsquo;s).Lingering patent losses following the patent cliff peak in 2012 have finally worked through the system, and Big Pharma&rsquo;s five-year generics exposure looks the lowest since before 2010. The group&rsquo;s outlook for growth is improving as we see declines annualize for several blockbusters including Nexium, Abilify, Cymbalta, Evista, Diovan, and Celebrex.In aggregate, we view the Big Pharma industry as 7% undervalued, largely driven by overly pessimistic pipeline expectations. Relative to consensus, we are projecting higher sales for several early stage drug candidates as well as approved drugs with expanding indications, including immuno-oncology drugs Opdivo (Bristol) and Keytruda (Merck), women&rsquo;s health drug Elagolix (AbbVie), and staph vaccine SA4Ag (Pfizer). See page 3 for a complete list of underappreciated Big Pharma drugs. Additionally, on page 3, we highlight the largest potential drugs that have very low awareness from the investment community.Analysts: Damien Conover CFA &amp; Sonia Vora

Healthcare Observer: As Long-Term Patent Exposure Ebbs, Innovation in Big Pharma Pipelines Support

Germany

Merck KGaA is a global pharmaceutical and chemicals company. The Company researches drugs in the areas oncology and neurodegenerative as well as autoimmune and inflammatory diseases. Also, it markets cardiovascular, fertility, endocrinology, and over-the-counter products as well as products for flat screens and the pharmaceutical, food, cosmetics, packaging, and coatings.

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Merck KGaA (MRK GR)

Navigating Risk off Transition

ChartonicsEurope is the underperform short bet but our EM outperform hit a road block as copper turned down hard (sold down long exposure on March...

Thomas Schroeder

Healthcare Observer: As Long-Term Patent Exposure Ebbs, Innovation in Big Pharma Pipelines Support

Pipeline innovation outpacing patent losses represents a core element of the wide moat ratings for most of the Big Pharma firms. Slowing patent...

Morningstar, Inc.

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