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>We had a near-term bullish outlook on MSCI ACWI (ACWI-US) and the S&amp;P 500 (SPX) from 4/22/25 to 11/18/25.</li>
<li>After being near-term neutral for a week, we flipped back to bullish in our 11/25/25 Compass, all while maintaining our intermediate-term bullish outlook (as of our 5/14/25 Compass).</li>
<li>We will stay near-term bullish as long as crucial support levels of 6480-6520 on SPX and $134-135.70 on ACWI-US continue to hold</li>
</ul>


We had a near-term bullish outlook on MSCI ACWI (ACWI-US) and the S&amp;P 500 (SPX) from 4/22/25 to 11/18/25.
After being near-term neutral for a week, we flipped back to bullish in our 11/25/25 Compass, all while maintaining our intermediate-term bullish outlook (as of our 5/14/25 Compass).
We will stay near-term bullish as long as crucial support levels of 6480-6520 on SPX and $134-135.70 on ACWI-US continue to hold


Upgrading Spain to Overweight; EM Uptrend Break; Buys in Discretionary, Financials, Materials

<ul>
<li>Large-Cap indexes (S&amp;P 500, Nasdaq 100, and DJI) remain bullish, all hitting new all-time highs last week while continuing to find short-term support at their respective 20-day MAs.</li>
<li>Mid-Caps (S&amp;P 400, Russell Mid-Cap) starting another leg higher following breakouts from 2-month consolidations. Small-caps (S&amp;P 600, Russell 2000) are likely to follow in the footsteps of large- and mid-caps.</li>
<li>Small-Cap indexes have been consolidating for 2.5 months following the historic rally from late-October to late-December 2023, a healthy sign. We expect they are gearing-up for another similar move higher.</li>
</ul>


Large-Cap indexes (S&amp;P 500, Nasdaq 100, and DJI) remain bullish, all hitting new all-time highs last week while continuing to find short-term support at their respective 20-day MAs.
Mid-Caps (S&amp;P 400, Russell Mid-Cap) starting another leg higher following breakouts from 2-month consolidations. Small-caps (S&amp;P 600, Russell 2000) are likely to follow in the footsteps of large- and mid-caps.
Small-Cap indexes have been consolidating for 2.5 months following the historic rally from late-October to late-December 2023, a healthy sign. We expect they are gearing-up for another similar move higher.


U.S. Dollar Rolling Over; Small-Caps to Follow Mid- And Large-Caps to New Highs; Buys in Cons. Disc.

Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

Equity Bottom-Up

<ul>
<li>China's outbound tourism recovery started much later than others in the region</li>
<li>In particular, Taiwan &amp; Korea began ramping outbound travel earlier (in Q222)</li>
<li>As destinations, Thailand &amp; Vietnam recovered early, but now lag HK's growth</li>
</ul>


China's outbound tourism recovery started much later than others in the region
In particular, Taiwan &amp; Korea began ramping outbound travel earlier (in Q222)
As destinations, Thailand &amp; Vietnam recovered early, but now lag HK's growth


China's Tourism Recovery Versus Other Major Tourist Sources in Asia: Delayed, Not Slower

<ul>
<li>Chinese outbound and domestic air traffic activity improved sharply Y/Y in the January-February LNY travel period, but activity remains far below pre-Covid levels</li>
<li>Given constrained outbound air capacity, we're surprised to see relatively low (65-66%) passenger load factors reported by the leading Chinese airlines during LNY</li>
<li>If planes don't begin to fill up with Chinese tourists soon, we believe some investors may become disappointed in the pace of China's travel recovery </li>
</ul>


Chinese outbound and domestic air traffic activity improved sharply Y/Y in the January-February LNY travel period, but activity remains far below pre-Covid levels
Given constrained outbound air capacity, we're surprised to see relatively low (65-66%) passenger load factors reported by the leading Chinese airlines during LNY
If planes don't begin to fill up with Chinese tourists soon, we believe some investors may become disappointed in the pace of China's travel recovery 


TRACKING TRAFFIC/Chinese Tourism: LNY Traffic Points to Slow Recovery in 2023

HK/China Equity Long-Short

Osbert Tang, CFA

Tongcheng Travel Holdings  / Equity Bottom-Up

<ul>
<li>While adjusted net profit of <a href="https://www.smartkarma.com/entities/tongcheng-elong-holdings-ltd" target="_blank" data-smartkarma-citation="entities:27363:1" rel="noopener">Tongcheng Travel Holdings Ltd (780 HK)</a> plummeted in 4Q22, the positive momentum in 1Q23 as revealed supports a sharp recovery in FY23.</li>
<li>Its huge exposure to lower-tier cities will fuel outlook while increase in monetisation will support profitability rebound. Success at Blackwhale membership program is another growth engine.  </li>
<li>Management is confident that revenue growth and better efficiency will lead the return of FY23 margin to pre-pandemic levels. Net cash position (12% of share price) is an added strength. </li>
</ul>


While adjusted net profit of Tongcheng Travel Holdings Ltd (780 HK) plummeted in 4Q22, the positive momentum in 1Q23 as revealed supports a sharp recovery in FY23.
Its huge exposure to lower-tier cities will fuel outlook while increase in monetisation will support profitability rebound. Success at Blackwhale membership program is another growth engine.  
Management is confident that revenue growth and better efficiency will lead the return of FY23 margin to pre-pandemic levels. Net cash position (12% of share price) is an added strength. 


Tongcheng Travel (780 HK): Best for Capturing Lower-Tier Cities' Growth

China

Huazhu Group Limited operates a hotel operator and franchisor. The Company provides hotel leasing, directly hotel operation, and co-development services. Huazhu Group mainly conducts businesses in China.

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Huazhu Group (HTHT US)

Upgrading Spain to Overweight; EM Uptrend Break; Buys in Discretionary, Financials, Materials

Upgrading Spain $EWP to Overweight; EM Uptrend Break $EEM $VWO; Lows likely "in" on $SPX and $ACWI; Buys Focused in global Discretionary,...

Vermilion Research

U.S. Dollar Rolling Over; Small-Caps to Follow Mid- And Large-Caps to New Highs; Buys in Cons. Disc.

U.S. Dollar $DXY Rolling Over; 10- and 30-Yr Treasury Yields Hit Major Resistance; Small-Caps to Follow Mid- and Large-Caps to New Highs $IWM $RTY...

Vermilion Research

China's Tourism Recovery Versus Other Major Tourist Sources in Asia: Delayed, Not Slower

In this insight we compare China's progress toward restoring outbound tourism activity to the progress shown by other major tourist sources in the...

Tracking Traffic

TRACKING TRAFFIC/Chinese Tourism: LNY Traffic Points to Slow Recovery in 2023

Jan-Feb air traffic shows the beginnings of a recovery in Chinese travel activity, but we're surprised to see outbound flights with load factors of...

Tracking Traffic

Tongcheng Travel (780 HK): Best for Capturing Lower-Tier Cities' Growth

Positive business momentum in 1Q23 supports a sharp recovery in FY23. Huge exposure to lower-tier cities and increase in monetisation will support...

Osbert Tang, CFA

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