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

<ul>
<li>Since March we have consistently said we believe any bottoming process would likely take weeks or months and could come with more tests of the lows, or even an undercut.</li>
<li>We are testing the March lows now in several global indexes, including the MSCI ACWI (ACWI-US), ACWI ex-US (ACWX-US), and EM (EEM-US).</li>
<li>While this is a logical spot for a bounce, we see rallies as selling opportunities at the index level</li>
</ul>


Since March we have consistently said we believe any bottoming process would likely take weeks or months and could come with more tests of the lows, or even an undercut.
We are testing the March lows now in several global indexes, including the MSCI ACWI (ACWI-US), ACWI ex-US (ACWX-US), and EM (EEM-US).
While this is a logical spot for a bounce, we see rallies as selling opportunities at the index level


MSCI ACWI, ACWI Ex-US, EM Testing Logical Support; Actionable Themes: Defensives & Reopening Stocks

US Treasury (10 Yr Generic) / Technical Analysis

<ul>
<li>We have discussed our expectations for rising rates for quite some time, but the 10-year yield is now testing 40-year downtrend resistance which comes in at 2.80-2.82%.</li>
<li>If there was ever a time for interest rates to move lower, this is where it needs to happen -- and it would be fitting, considering extremely bearish bond sentiment.</li>
<li>On the other hand, if the 10-year Treasury is above 2.82% we see a secular reversal where rising rates would be the new normal</li>
</ul>


We have discussed our expectations for rising rates for quite some time, but the 10-year yield is now testing 40-year downtrend resistance which comes in at 2.80-2.82%.
If there was ever a time for interest rates to move lower, this is where it needs to happen -- and it would be fitting, considering extremely bearish bond sentiment.
On the other hand, if the 10-year Treasury is above 2.82% we see a secular reversal where rising rates would be the new normal


10-Year Treasury Yield Testing 40-Year Resistance; Upgrading Health Care to Overweight

Global Special Situations & Strategy, SR Services Ltd

David Lepper

Global Special Situations & Strategy

SR Services Ltd

SR Services provides Strategic Knowledge and Solutions services for Family Offices and Corporate Business. 

We deliver this via advisory services, strategic planning, opportunity analysis/sourcing, as well as solution implementation. 

Whilst, we create intellectual discipline and operational leverage for your projects or daily activities, our ultimate objective is to empower whilst enhancing your decision making. 

Strategic Knowledge and Solutions

Event-Driven

Another activist letter: Bluebell Capital Partners (Bluebell) published an open letter to GSK last week (22nd September 2021). In it, Bluebell effectively echoed the stance taken by Elliott, with a stronger view towards Dame Emma Walmsley and her potential role as the New GSK CEO. Whilst we see the merit in this, as we later discuss, the overall situation is not as clear cut. Why more may follow: GSK has been silent and failed to release information in a timely manner and as promised. The inertness by GSK is reflected in the share price performance since 23rd June 2021. Shareholders need to see tangible evidence that matters are being dealt with. We outline why we believe this is likely in the coming quarter, which should allow for the value discount to be further illuminated.Event-driven value play: We believe that once the market focuses on the sum of the parts of “New GSK” and “Consumer Healthcare” and understands who is to lead the next era of GSK, then the gap to our fair value target should begin to close.

Another activist letter: Bluebell Capital Partners (Bluebell) published an open letter to GSK last week (22nd September 2021). In it, Bluebell effectively echoed the stance taken by Elliott, with a stronger view towards Dame Emma Walmsley and her potential role as the New GSK CEO. Whilst we see the merit in this, as we later discuss, the overall situation is not as clear cut. Why more may follow: GSK has been silent and failed to release information in a timely manner and as promised. The inertness by GSK is reflected in the share price performance since 23rd June 2021. Shareholders need to see tangible evidence that matters are being dealt with. We outline why we believe this is likely in the coming quarter, which should allow for the value discount to be further illuminated.Event-driven value play: We believe that once the market focuses on the sum of the parts of “New GSK” and “Consumer Healthcare” and understands who is to lead the next era of GSK, then the gap to our fair value target should begin to close.

GSK (GSK.L/​​​​GSK.N):  Bluebell Capital Partners Aligns with Elliott

Wisdomtree Japan Hedged Eq / Technical Analysis

Market dynamics continue to send mixed signals, but the bottom line is that not one MSCI ACWI Sector is breaking down, and important price support levels are holding in the US, Europe, and Japan. Additionally, the MSCI ACWI, ACWI ex-US, and EAFE indexes all remain above critical support levels. Until supports start to break we cannot be bearish. It is also worth noting that various indicators could be making a turn for the better, including early signs of interest rates bottoming in the US and Germany, a potential false breakdown in crude oil, and high yield spreads leveling-out.

Market dynamics continue to send mixed signals, but the bottom line is that not one MSCI ACWI Sector is breaking down, and important price support levels are holding in the US, Europe, and Japan. Additionally, the MSCI ACWI, ACWI ex-US, and EAFE indexes all remain above critical support levels. Until supports start to break we cannot be bearish. It is also worth noting that various indicators could be making a turn for the better, including early signs of interest rates bottoming in the US and Germany, a potential false breakdown in crude oil, and high yield spreads leveling-out.

Critical Supports Holding in the US, Europe, & Japan; Buying Health Care, Utilities, Materials, Tech

<ul>
<li>It is three weeks since Elliott’s 1st of July 2021 public letter to GSK and a month on from the 23rd of June briefing on the “New GSK”. The share price remains largely static and in line with the FTSE all-share index. </li>
<li>The Second Quarter results are due to be released on the 28th of July 2021 which should allow GSK another opportunity to address the issues raised as a result of Elliott’s campaign and potentially placate the activists and in particular their concerns around GSK’s de-merger plans.</li>
<li>We examine the state of play for GSK and Elliott and discuss several key questions. <ul>
<li>Is this could be the Calm before the storm?  </li>
<li>What are the core areas of the Elliott campaign?</li>
<li>What does GSK's report card look like, post-Elliott's public letter?</li>
<li>Is the announcement of the Consumer Healthcare CEO the right move?</li>
<li>What questions should be asked by investors?</li>
<li>What should we expect next?</li>
</ul>
</li>
</ul>


It is three weeks since Elliott’s 1st of July 2021 public letter to GSK and a month on from the 23rd of June briefing on the “New GSK”. The share price remains largely static and in line with the FTSE all-share index. 
The Second Quarter results are due to be released on the 28th of July 2021 which should allow GSK another opportunity to address the issues raised as a result of Elliott’s campaign and potentially placate the activists and in particular their concerns around GSK’s de-merger plans.
We examine the state of play for GSK and Elliott and discuss several key questions. 
Is this could be the Calm before the storm?  
What are the core areas of the Elliott campaign?
What does GSK's report card look like, post-Elliott's public letter?
Is the announcement of the Consumer Healthcare CEO the right move?
What questions should be asked by investors?
What should we expect next?




GSK (GSK.L/​​​GSK.N): Revisiting Elliott’s Letter and What Remains Unanswered

United States

Sanofi operates as a pharmaceutical company. The Company manufactures prescription pharmaceuticals and vaccines. Sanofi also develops cardiovascular, thrombosis, metabolic disorder, central nervous system, and oncology medicines and drugs. Sanofi serves customers worldwide.

Horizon Pharma plc operates as a biopharmaceutical company. Horizon Pharma develops, acquires, and commercializes late-stage biopharmaceutical therapies for the treatment of pain and inflammation as well as specialty and orphan diseases.

Catalent, Inc. provides delivery technologies and development solutions for drugs, biologics and consumer health products. The Company's oral, injectable, and respiratory delivery technologies address the diversity of the pharmaceutical industry including small molecules, large molecule biologics and consumer health products.

Intra-Cellular Therapies Inc. researches and develops biopharmaceutical drugs. The Company engages in the research and development of small molecule drugs to treat neuropsychiatric and neurological diseases and other disorders of the central nervous system. Intra-Cellular Therapies offers its products to the medical industry.

Reata Pharmaceuticals, Inc. operates as a biopharmaceutical company. The Company focuses on identifying, developing, and commercializing product candidates that modulate the activity of key regulatory proteins involved in the biology of mitochondrial function, oxidative stress, and inflammation to address the unmet medical needs of patients with various life-threatening diseases.

Elanco Animal Health Incorporated operates as an animal health care company. The Company develops, manufactures, and markets products for companion and food animals. Elanco Animal Health serves clients worldwide.

Perrigo Company PLC is a global healthcare supplier that develops, manufactures, and distributes OTC and generic prescription pharmaceuticals, infant formulas, nutritional products, active pharmaceutical ingredients and pharmaceutical and medical diagnostic products. The Company's primary markets and locations of manufacturing and logistics operations are the US, UK, Mexico, and Australia.

Corcept Therapeutics Inc. is a pharmaceutical company that discovers and develops drugs for the treatment of severe metabolic and psychiatric disorders. The Company's lead product modulates the effect of cortisol, also known as the "stress hormone", by selectively blocking the binding of cortisol to one of its two known receptors, the GR-II receptor.

Prestige Brands Holdings, Inc. distributes over-the-counter healthcare and household cleaning products to retail stores in the United States, Canada and other international markets.  The Company distributes oral, eye and skin care; cough, cold, allergy and sinus; and household cleansers, sponges, scrubbers and cleaning pads.

Axsome Therapeutics, Inc. operates as a biopharmaceutical company. The Company focuses on developing therapies for pain, neurological disorders, and other central nervous system. Axsome Therapeutics serves patients worldwide.

Sun Pharmaceutical Industries Limited manufactures and markets pharmaceuticals for domestic and international distribution. The Company's pharmaceutical portfolio includes drugs in the areas of diabetes, cardiology, neurology, psychiatry and  gastroenterology.

Daiichi Sankyo Co, Ltd is a holding company established through merger of Sankyo and Daiichi pharmaceutical. The Group manufactures pharmaceuticals for human/veterinary use and medical tools and equipment. It also researches and promotes products through related companies throughout the world. The Group also produces food, food additives, livestock feeds, and agrochemicals.

Astellas Pharma Inc. is a pharmaceutical company committed to the therapeutic fields of Urology, Immunology including Transplantation and Infectious Diseases, Oncology, Neuroscience and DM Complications and Metabolic Diseases. With over 17,000 global employees, Astellas researches, develops, manufactures, and promotes its prescription drugs through subsidiaries in the US, Europe, and Asia

Takeda Pharmaceutical Co Ltd focuses on the Research & Development, Manufacturing, Sales and Marketing and Import/Export of Pharmaceutical Drugs. The Company focuses on the following core therapeutic areas: Cardiovascular & Metabolic, Oncology, Central Nervous System, Respiratory & Immunology, General Medicine (Gastrointestinal & Genitourinary) and Vaccine.

Otsuka Holdings Co Ltd is a pharmaceutical company. The Company manufactures, sells, imports and exports pharmaceuticals, clinical testing, and medical equipment for intractable diseases.

Jiangsu Hengrui Medicine Co., Ltd. develops, manufactures, and markets a variety of medicines and medicine packing materials. The Company's products include anti-tumor medicines, pain-killers, anti-infection medicines, aluminum foil, and other related products.

Zhangzhou Pientzehuang Pharmaceutical Co., Ltd. manufactures and markets Chinese traditional medicines, including Pientzehuang, Pientzehuang capsules, Pientzehuang lozenge, cough syrup, and other related products.

Zhangzhou Pientzehuang Pharmaceutical Co., Ltd. (600436 CH)

Zhangzhou Pientzehuang Pharmaceutical Co., Ltd.

UCB SA is a biopharmaceutical company. The Company specializes in the treatment of central nervous system disorders and inflammatory diseases. UCB operates worldwide.

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.

GlaxoSmithKline PLC operates as a research-based pharmaceutical company. The Company develops, manufactures, and markets vaccines, prescription, and over-the-counter medicines, as well as health-related consumer products. GlaxoSmithKline provides products for infections, depression, skin conditions, asthma, heart and circulatory disease, and cancer.

GSK PLC operates as a research-based pharmaceutical company. The Company develops, manufactures, and markets vaccines, prescription, and over-the-counter medicines, as well as health-related consumer products. GSK provides products for infections, depression, skin conditions, asthma, heart and circulatory disease, and cancer.

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GSK (GSK US)

MSCI ACWI, ACWI Ex-US, EM Testing Logical Support; Actionable Themes: Defensives & Reopening Stocks

We are testing the March lows in several global indexes, including the MSCI $ACWI, ACWI ex-US $ACWX, and EM $EEM. While this is a logical spot for...

Vermilion Research

10-Year Treasury Yield Testing 40-Year Resistance; Upgrading Health Care to Overweight

10-year Treas yield $TNX is now testing 40-year downtrend resistance at 2.8-2.82%. If interest rates are to move lower, now would be the time,...

Vermilion Research

GSK (GSK.L/GSK.N): Bluebell Capital Partners Aligns with Elliott

Another activist letter is no real surprise. GSK has failed to release pertinent information on the Consumer Healthcare spinoff & “New GSK”; As...

David Lepper

Critical Supports Holding in the US, Europe, & Japan; Buying Health Care, Utilities, Materials, Tech

Various indicators are making a turn for the better, including early signs of interest rates bottoming in the US and Germany, a false breakdown in...

Vermilion Research

GSK (GSK.L/GSK.N): Revisiting Elliott’s Letter and What Remains Unanswered

It is 3 weeks since Elliott’s 1 July public letter to @GSK and a month on from the 23rd June briefing from GSK on “New GSK”. Our latest Report asks...

David Lepper

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

MSCI ACWI, ACWI Ex-US, EM Testing Logical Support; Actionable Themes: Defensives & Reopening Stocks

We are testing the March lows in several global indexes, including the MSCI $ACWI, ACWI ex-US $ACWX, and EM $EEM. While this is a logical spot for...

Vermilion Research

10-Year Treasury Yield Testing 40-Year Resistance; Upgrading Health Care to Overweight

10-year Treas yield $TNX is now testing 40-year downtrend resistance at 2.8-2.82%. If interest rates are to move lower, now would be the time,...

Vermilion Research

GSK (GSK.L/​​​​GSK.N): Bluebell Capital Partners Aligns with Elliott

Another activist letter is no real surprise. GSK has failed to release pertinent information on the Consumer Healthcare spinoff & “New GSK”; As...

David Lepper

Critical Supports Holding in the US, Europe, & Japan; Buying Health Care, Utilities, Materials, Tech

Various indicators are making a turn for the better, including early signs of interest rates bottoming in the US and Germany, a false breakdown in...

Vermilion Research

GSK (GSK.L/​​​GSK.N): Revisiting Elliott’s Letter and What Remains Unanswered

It is 3 weeks since Elliott’s 1 July public letter to @GSK and a month on from the 23rd June briefing from GSK on “New GSK”. Our latest Report asks...

David Lepper

GSK (GSK.L/GSK.N): Bluebell Capital Partners Aligns with Elliott

GSK (GSK.L/GSK.N): Revisiting Elliott’s Letter and What Remains Unanswered