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

Taiwan Semiconductor (TSMC) / Technical Analysis

<ul>
<li>We believe there is significant evidence that global equities (MSCI ACWI) have bottomed, and a year-end rally has begun. Buys highlighted in global Technology, Discretionary, Real Estate, and Steel/Mining.</li>
<li>We discussed in our prior Int'l Compass (11/2/23) how the false breakdown in MSCI ACWI (local currency) was bullish, and a potent rally has ensued. We expect more upside ahead.</li>
<li>Now getting bullish 3+ month downtrend reversals and false breakdowns in the EURO STOXX 50, ACWI-US, MSCI ACWI ex-US (ACWX-US), MSCI EM (EEM-US), and EAFE (EFA-US). Major risk-on signals everywhere.</li>
</ul>


We believe there is significant evidence that global equities (MSCI ACWI) have bottomed, and a year-end rally has begun. Buys highlighted in global Technology, Discretionary, Real Estate, and Steel/Mining.
We discussed in our prior Int'l Compass (11/2/23) how the false breakdown in MSCI ACWI (local currency) was bullish, and a potent rally has ensued. We expect more upside ahead.
Now getting bullish 3+ month downtrend reversals and false breakdowns in the EURO STOXX 50, ACWI-US, MSCI ACWI ex-US (ACWX-US), MSCI EM (EEM-US), and EAFE (EFA-US). Major risk-on signals everywhere.


Year-End Rally Underway; Many Bullish Reversals/False Breakdowns; Buys: Tech, Cons. Disc., RE, Steel

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>If you are still long the <a href="https://www.smartkarma.com/entities/hokuhoku-financial-group-inc" target="_blank" data-smartkarma-citation="entities:19006:1" rel="noopener">Financial Group (8377 JP)</a> from before, stay long.If you sold Hokuhoku from before, be long again, and buy on weakness</li>
<li>Disaster for arb players as AusSuper rewrites the record books as an investor class and shoots down Brookfield's sweetened Offer for <a href="https://www.smartkarma.com/entities/origin-energy-ltd" target="_blank" data-smartkarma-citation="entities:797:1" rel="noopener">Origin Energy (ORG AU)</a>.</li>
<li>
<a href="https://www.smartkarma.com/entities/kyocera-corp" target="_blank" data-smartkarma-citation="entities:753:1" rel="noopener">Kyocera (6971 JP)</a> announced Q2 results and lowered its full-year forecast. Then the CEO said it was "reconsidering" what to do with <a href="https://www.smartkarma.com/entities/kddi-corp" target="_blank" data-smartkarma-citation="entities:639:1" rel="noopener">KDDI (9433 JP)</a> shares (after an AGM disaster).</li>
</ul>


If you are still long the Financial Group (8377 JP) from before, stay long.If you sold Hokuhoku from before, be long again, and buy on weakness
Disaster for arb players as AusSuper rewrites the record books as an investor class and shoots down Brookfield's sweetened Offer for Origin Energy (ORG AU).

Kyocera (6971 JP) announced Q2 results and lowered its full-year forecast. Then the CEO said it was "reconsidering" what to do with KDDI (9433 JP) shares (after an AGM disaster).


Last Week in Event SPACE: Hokuhoku, Origin Energy, KDDI, BoJ

Travis Lundy

<ul>
<li>In <a href="https://www.smartkarma.com/insights/march-2024-nikkei-225-rebal-look-for-zozo-ryohin-keikaku-and-maybe-a-socionext-split" target="_blank" data-smartkarma-citation="insights:112214" rel="noopener">March 2024 Nikkei 225 Rebal - Look for Zozo, Ryohin Keikaku, and Maybe a Socionext Split</a> I suggested <a href="https://www.smartkarma.com/entities/socionext-inc" target="_blank" data-smartkarma-citation="entities:36351:1" rel="noopener">Socionext (6526 JP)</a> needed a stock split to get in.</li>
<li>Today after the close, Socionext reported H1, guided up full-year earnings (still too conservative), raised its div, and announced a 5:1 stock split for Jan1 2024. </li>
<li>
<a href="https://www.smartkarma.com/entities/disco-corp" target="_blank" data-smartkarma-citation="entities:15817:1" rel="noopener">DISCO Corp (6146 JP)</a> is now likely to be a top 75, which leaves the question of which Consumer Goods stock would likely be added. </li>
</ul>


In March 2024 Nikkei 225 Rebal - Look for Zozo, Ryohin Keikaku, and Maybe a Socionext Split I suggested Socionext (6526 JP) needed a stock split to get in.
Today after the close, Socionext reported H1, guided up full-year earnings (still too conservative), raised its div, and announced a 5:1 stock split for Jan1 2024. 

DISCO Corp (6146 JP) is now likely to be a top 75, which leaves the question of which Consumer Goods stock would likely be added. 


March 2024 Nikkei 225 Rebal - Socionext, Disco and a Consumer Goods Stock (Ryohin Keikaku?) To ADD

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

<ul>
<li>
<a href="https://www.smartkarma.com/entities/light-wonder-inc" target="_blank" data-smartkarma-citation="entities:36929:1" rel="noopener">Light &amp; Wonder (LNW US)</a>/ <a href="https://www.smartkarma.com/entities/light-wonder-inc-7e7d040f-e811-4fb9-9710-796a39af299e" target="_blank" data-smartkarma-citation="entities:40171:1" rel="noopener">Light &amp; Wonder (LNW AU)</a> replaced <a href="https://www.smartkarma.com/entities/united-malt-group-ltd" target="_blank" data-smartkarma-citation="entities:29116:1" rel="noopener">United Malt Group Ltd (UMG 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> last week.</li>
<li>
<a href="https://www.smartkarma.com/entities/newcrest-mining-ltd" target="_blank" data-smartkarma-citation="entities:691:1" rel="noopener">Newcrest Mining (NCM AU)</a> stops trading this week and should be replaced by <a href="https://www.smartkarma.com/entities/newmont-mining-corp" target="_blank" data-smartkarma-citation="entities:14503:1" rel="noopener">Newmont Mining (NEM US)</a> CDIs in the ASX indices.</li>
<li>Another week of ETF outflows for China with the largest outflows from trackers benchmarked to the CSI 1000 Index.</li>
</ul>



Light &amp; Wonder (LNW US)/ Light &amp; Wonder (LNW AU) replaced United Malt Group Ltd (UMG AU) in the S&amp;P/ASX 200 (AS51 INDEX) last week.

Newcrest Mining (NCM AU) stops trading this week and should be replaced by Newmont Mining (NEM US) CDIs in the ASX indices.
Another week of ETF outflows for China with the largest outflows from trackers benchmarked to the CSI 1000 Index.


Index Rebalance & ETF Flow Recap: NKY, ASX, Liontown, J&T Express, JP/IN Positioning, IndusInd Bank

<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 end January. 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 6-28x ADV (11-50% of real float) on the inclusions and sell between 2.8-44x 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> could be capped at 11% of the index weight and there will be buying in <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> due to the stepwise addition.</li>
</ul>


The review period for the Nikkei 225 (NKY INDEX) March rebalance ends end January. There could be three changes at the rebalance with sector balance in focus.
Depending on the changes, passive trackers will need to buy between 6-28x ADV (11-50% of real float) on the inclusions and sell between 2.8-44x ADV on the deletions.

Fast Retailing (9983 JP) could be capped at 11% of the index weight and there will be buying in Nitori Holdings (9843 JP) due to the stepwise addition.


Nikkei 225 Index Rebalance Preview (Mar 2024): Ranking, Capping, Funding & Other Changes

Japan

DISCO CORPORATION manufactures abrasive and precision industrial machinery for cutting and grinding purposes.  The Company's products are applied in the semiconductor, electronics, and construction industries to produce consumer goods such as personal computers, digital cameras, video game systems, and Digital Video Disc (DVD) players.

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DISCO Corp (6146 JP)

Year-End Rally Underway; Many Bullish Reversals/False Breakdowns; Buys: Tech, Cons. Disc., RE, Steel

There is significant evidence that global equities $ACWI have bottomed, and a year-end rally has begun. It all started when we discussed that the...

Vermilion Research

Last Week in Event SPACE: Hokuhoku, Origin Energy, KDDI, BoJ

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

March 2024 Nikkei 225 Rebal - Socionext, Disco and a Consumer Goods Stock (Ryohin Keikaku?) To ADD

Socionext (6526) has announced a stock split. That means it is likely to get into Nikkei 225 in March 2024. Disco is now an ADD too. Zozo or Ryohin...

Travis Lundy

Index Rebalance & ETF Flow Recap: NKY, ASX, Liontown, J&T Express, JP/IN Positioning, IndusInd Bank

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

Brian Freitas

Nikkei 225 Index Rebalance Preview (Mar 2024): Ranking, Capping, Funding & Other Changes

There could be 3 changes in March + Fast Retailing capping. Stepwise inclusion of Nitori too. Socionext could be an add if it splits its stock. As...

Brian Freitas

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