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

Positive news surrounding trade and dovish Fed rhetoric has continued to flow, resulting in a reversal from December's oversold extremes to our current, overbought extremes according to the S&amp;P 500’s percentage of stocks above their 50-day moving average (see chart below). We continue to believe the market is going through a bottoming process, and we prefer to be on the cautious side at current levels considering how far and how quickly the market has risen. In today’s report we highlight attractive stocks within Materials and Technology: large- and small-cap gold, silver, platinum, and optical equipment companies.

Positive news surrounding trade and dovish Fed rhetoric has continued to flow, resulting in a reversal from December's oversold extremes to our current, overbought extremes according to the S&amp;P 500’s percentage of stocks above their 50-day moving average (see chart below). We continue to believe the market is going through a bottoming process, and we prefer to be on the cautious side at current levels considering how far and how quickly the market has risen. In today’s report we highlight attractive stocks within Materials and Technology: large- and small-cap gold, silver, platinum, and optical equipment companies.

U.S. Equity Strategy: Nearing Short-Term Overbought Extremes

With U.S. markets stumbling, the MSCI ACWI index is breaking down to new lows: defensive Sectors remain attractive. Relative to MSCI ACWI however, emerging markets are the place to be. China, Brazil, Hungary, Qatar, India, Poland, and Indonesia all display positive price and/or RS trends. In this report we recap technical important levels on all major indexes and highlight attractive stocks within Real Estate, Health Care/Pharma, Precious Metals Mining, and Utilities.

With U.S. markets stumbling, the MSCI ACWI index is breaking down to new lows: defensive Sectors remain attractive. Relative to MSCI ACWI however, emerging markets are the place to be. China, Brazil, Hungary, Qatar, India, Poland, and Indonesia all display positive price and/or RS trends. In this report we recap technical important levels on all major indexes and highlight attractive stocks within Real Estate, Health Care/Pharma, Precious Metals Mining, and Utilities.

Materials, IPO & Equity Analyst

Venkat Ramana Nandyal

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

Shandong Gold Mining   / Equity Capital Markets

<a href="https://www.smartkarma.com/entities/27455" target="_blank" data-smartkarma-citation="entities:27455:1">Shandong Gold Mining Co Ltd (1787 HK)</a> ’s first day of trading ended with a whimper. The company issued the stock at HK$14.70/share. The stock traded between HK$14.68-$14.72/share and closed at HK$14.70/share.In absence of any strong triggers in the short-term, we expect the stock to drift down post-stabilisation period or after one week of trading as evidenced in Global Equity Research‘s note <a href="https://www.smartkarma.com/insights/ipo-trading-strategy-from-pop-to-flop-a-deep-dive-on-hk-ipo-performance" target="_blank" data-smartkarma-citation="insights:24258">IPO Trading Strategy: From Pop to Flop? A Deep-Dive on HK IPO Performance</a> published by <a href="https://www.smartkarma.com/profiles/1486" target="_blank" data-smartkarma-citation="accounts:1486">Rickin Thakrar</a>. Our base case valuation remains HK$11.10/share.

Shandong Gold Mining Co Ltd (1787 HK) ’s first day of trading ended with a whimper. The company issued the stock at HK$14.70/share. The stock traded between HK$14.68-$14.72/share and closed at HK$14.70/share.In absence of any strong triggers in the short-term, we expect the stock to drift down post-stabilisation period or after one week of trading as evidenced in Global Equity Research‘s note IPO Trading Strategy: From Pop to Flop? A Deep-Dive on HK IPO Performance published by Rickin Thakrar. Our base case valuation remains HK$11.10/share.  

Shandong Gold Trading Update: First Day No Show

Shandong Gold Mining Co., Ltd / Equity Capital Markets

<a href="https://www.smartkarma.com/entities/12908" target="_blank" data-smartkarma-citation="entities:12908:1">Shandong Gold Mining Co., (600547 CH)</a> has recently filed a revised PHIP. <a href="https://www.ft.com/content/9e62624c-ac4b-11e8-89a1-e5de165fa619" target="_blank">Financial Times reports</a> that the company is likely to raise up to HK$1B and it appears to have received approval from the Hong Kong listing committee to sell ~380M shares. The company has still not provided pricing details of the IPO and H1/18 results. What's new is gold prices have fallen nearly ~8% YTD, as a result, we believe if the gold prices range ~US$1200/oz for rest of year the company is likely to report a net loss for the H2/18. We continue to be negative on IPO based on the company’s financial, however, we reserve our judgment until the IPO pricing is provided.

Shandong Gold Mining Co., (600547 CH) has recently filed a revised PHIP. Financial Times reports that the company is likely to raise up to HK$1B and it appears to have received approval from the Hong Kong listing committee to sell ~380M shares. The company has still not provided pricing details of the IPO and H1/18 results. What's new is gold prices have fallen nearly ~8% YTD, as a result, we believe if the gold prices range ~US$1200/oz for rest of year the company is likely to report a net loss for the H2/18. We continue to be negative on IPO based on the company’s financial, however, we reserve our judgment until the IPO pricing is provided.

Shandong Gold IPO Preview: Trim Hedges & Improve Margins, But Can They Do It

Key themes:<ul><li>Downgrading Financials. Given the Sector’s relative deterioration, we are downgrading Financials to market weight. Pockets of strength still exist (e.g. exchanges), but breadth is problematic... see page 3</li><li>Gold miners are bullishly inflecting. A Group we recommended last week, gold miners continue to bullishly inflect. This is a buying opportunity... see pages 3, 8-14</li><li>Buy biotechs, overweight Health Care. In today’s report we highlight actionable charts throughout Health Care, our top-ranked Sector, emphasizing widespread opportunities within biotechs ... see pages 3, 15-19</li></ul>

Key themes:Downgrading Financials. Given the Sector’s relative deterioration, we are downgrading Financials to market weight. Pockets of strength still exist (e.g. exchanges), but breadth is problematic... see page 3Gold miners are bullishly inflecting. A Group we recommended last week, gold miners continue to bullishly inflect. This is a buying opportunity... see pages 3, 8-14Buy biotechs, overweight Health Care. In today’s report we highlight actionable charts throughout Health Care, our top-ranked Sector, emphasizing widespread opportunities within biotechs ... see pages 3, 15-19

U.S. Equity Strategy: Reiterating Biotechs, Gold Miners; Downgrading Financials to Market Weight

Canada

Ivanhoe Mines Ltd. is a Canadian mining company focused on advancing its principal mine development projects in southern Africa: the Platreef platinum-gold-nickel-copper project in South Africa, and the Kamoa-Kakula copper project and the Kipushi zinc-copper-silver-germanium mine in the DRC.

Agnico Eagle Mines Limited is a gold producer with operations primarily in northwestern Quebec, northern Mexico, northern Finland and Nunavut.  The Company also has exploration activities in Canada, Europe, Latin America, and the United States.  Agnico Eagle Mines focuses on the exploration, development, and expansion of its gold properities primarily from underground operations.

Lundin Mining Corporation is a diversified base metals mining company with operations in Chile, Portugal, Sweden, Spain and the United States, producing copper, zinc, lead and nickel. The Company holds interest in the Tenke Fungurume copper/cobalt mine in the Democratic Republic of Congo and a cobalt refinery located in Kokkola, Finland.

Pan American Silver Corporation is a primary silver producer.   The Company has seven operating mines in Mexico,  Peru, Argentina and Bolivia and several development projects in USA,  Mexico, Peru and Argentina.

Teck Resources Ltd. is an integrated natural resource group with activities in mining, smelting, and refining.  The Company mines zinc, copper, molybdenum, gold, and metallurgical coal in the United States, Canada, Peru, and Chile. Teck also produces refined metals, specialized metal products, and other products.

Alamos Gold Inc. is an intermediate gold producer. The Company acquires, explores and produces gold from mines located in Canada, Mexico and the United States.

Yamana Gold Inc. is an intermediate gold producer with production, development stage, and exploration properties throughout Brazil.  The Company also holds gold exploration properties in Argentina.

Lundin Gold Inc. is a Canadian mining company. The Company owns and operates gold projects located in southeast Ecuador.

Hudbay Minerals Inc. operates as a mining company. The Company mines and produces zinc, copper, gold, and silver. Hudbay Minerals offers its services across the Americas .

B2Gold Corporation is a gold exploration and production company. The Company is a Vancouver based gold producer with mines in Nicaragua and a portfolio of development and exploration assets in Nicaragua, Colombia and Uruguay.

Fortescue Metals Group Ltd. explores for and produces iron ore. The Company conducts business worldwide.

United States Steel Corporation operates as an integrated steel producer. The Company manufactures flat-rolled and tubular products with production operations in North America and Europe. United States Steel serves the automotive, appliance, container, industrial machinery, construction, and oil and gas industries.

POSCO Holdings Inc. manufactures and distributes steel products. The Company produces crude steel, hot rolled steel, cold rolled steel, stainless steel, steel plates, wire rods, galvanized steel, electrical steel, and other related products. POSCO Holdings markets its products worldwide.

JFE Holdings, Inc. is a holding company which was established through the merger of NKK Corp and Kawasaki Steel Corp.  The Company manages and conducts its subsidiaries' business, which is steel production and integrated engineering services.

Vedanta Limited mines, produces, and exports base metals. The Company mines and distributes metals such as zinc, iron ore, copper, silver, and aluminium, as well as operates power plants. Vedanta markets its products worldwide.

Newcrest Mining Limited is a gold mining, exploration and production company. The Company is geographically focused in Australia, the Pacific region and Asia. Newcrest Mining operates projects within six provinces in four countries, focusing on the Cadia East and Lihir MOPU expansion projects and the Wafi Golpu and Namosi greenfield projects.

Nippon Steel Corp is an integrated steel maker. The Company produces various types of steel products used for industrial machinery & equipment and exports them worldwide.  Nippon Steel provides plant construction and urban development and also develops new businesses such as chemicals, ceramics, electronic equipment and information & communication systems.

China Steel Corporation manufactures and markets a variety of steel products. The main products are hot rolled coils and sheets, cold rolled coils and sheets, wire rods, steel plates, and steel bars.

China Hongqiao Group Ltd. manufactures aluminum products. The Company's aluminum products consist of molten aluminum alloy, aluminum alloy ingots and aluminum busbars.

Baoshan Iron & Steel Co., Ltd. manufactures and markets a variety of iron and steel products including cold rolled plates and coils, hot rolled plates and coils, seamless steel tubes, high-speed wire rods, and steel billets.  The company also operates in related energy production businesses.

Barrick Gold Corporation is an international gold company with operating mines and development projects in the United States, Canada, South America, Australia, and Africa.

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Barrick Gold (ABX CN)

U.S. Equity Strategy: Nearing Short-Term Overbought Extremes

Positive news surrounding trade and dovish Fed rhetoric has continued to flow, resulting in a reversal from December's oversold extremes to our...

Vermilion Research

Global Markets Deteriorating...Except EM

With U.S. markets stumbling, the MSCI ACWI index is breaking down to new lows: defensive Sectors remain attractive. Relative to MSCI ACWI however,...

Vermilion Research

Shandong Gold Trading Update: First Day No Show

Shandong Gold Mining Co Ltd (1787 HK) ’s first day of trading ended with a whimper. The company issued the stock at HK$14.70/share. The stock...

Venkat Ramana Nandyal

Shandong Gold IPO Preview: Trim Hedges & Improve Margins, But Can They Do It

Shandong Gold Mining Co., (600547 CH) has recently filed a revised PHIP. Financial Times reports that the company is likely to raise up to HK$1B...

Venkat Ramana Nandyal

U.S. Equity Strategy: Reiterating Biotechs, Gold Miners; Downgrading Financials to Market Weight

Key themes: Downgrading Financials. Given the Sector’s relative deterioration, we are downgrading Financials to market weight. Pockets of strength...

Vermilion Research

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