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

For now we view the recent pullback as a countertrend move that helped correct the extended and overbought conditions we noted over the past two weeks. Overhead resistance on the MSCI EM, EAFE, and ACWI ex-US indexes (all priced in local currency) is something to be aware of, however if the ACWI-US is above $70 our bullish outlook remains appropriate.  In today's report we highlight attractive charts in both defensive and cyclical Sectors. On the semi-defensive side, Sectors covered include Health Care and Services. On the cyclical side, Sectors covered include Energy, Financials, Materials, and Transportation

For now we view the recent pullback as a countertrend move that helped correct the extended and overbought conditions we noted over the past two weeks. Overhead resistance on the MSCI EM, EAFE, and ACWI ex-US indexes (all priced in local currency) is something to be aware of, however if the ACWI-US is above $70 our bullish outlook remains appropriate.  In today's report we highlight attractive charts in both defensive and cyclical Sectors. On the semi-defensive side, Sectors covered include Health Care and Services. On the cyclical side, Sectors covered include Energy, Financials, Materials, and Transportation

Global Equity Strategy: Short-Term Bullish Trends Clash With Longer-Term Resistance

MSCI Emerging Markets Index / Technical Analysis

Global equities continue to trend higher following breakouts that have occurred during the past two weeks. Over this timeframe we have been recommending adding exposure to cyclical Sectors and, despite them getting near-term extended, we believe these upside moves are likely just getting going. Additionally, the US dollar is breaking below support and EM equities are breaking above resistance, only adding to our bullish outlook on global equities. We highlight actionable set-ups within the Consumer Discretionary, Global Real Estate and Utilities Sectors.

Global equities continue to trend higher following breakouts that have occurred during the past two weeks. Over this timeframe we have been recommending adding exposure to cyclical Sectors and, despite them getting near-term extended, we believe these upside moves are likely just getting going. Additionally, the US dollar is breaking below support and EM equities are breaking above resistance, only adding to our bullish outlook on global equities. We highlight actionable set-ups within the Consumer Discretionary, Global Real Estate and Utilities Sectors.

Global Equity Strategy: Still Bullish, But Extended Near-Term

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

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

Topsports International Holdings / Equity Capital Markets

<a href="https://www.smartkarma.com/entities/topsports-international" target="_blank" data-smartkarma-citation="entities:28153:1" rel="noopener">Topsports International (TOP HK)</a> is the sportswear division of Belle International. Topsports is the largest sportswear retailer in China as measured by retail sales value, with a 15.9% market share in 2018, according to Frost &amp; Sullivan. Topsports has filed for a Hong Kong IPO to raise potentially $1 billion.<div class="content-highlight">With enviable exposure to two of the largest global sportswear brands and one of the largest sportswear markets in the world, Topsports looks well positioned to benefit from consumers embracing the latest healthy lifestyles, increased sports participation rates and supportive Government policies in China. Overall, we believe that Topsport’s fundamentals offer more positives than negatives.</div>

Topsports International (TOP HK) is the sportswear division of Belle International. Topsports is the largest sportswear retailer in China as measured by retail sales value, with a 15.9% market share in 2018, according to Frost &amp; Sullivan. Topsports has filed for a Hong Kong IPO to raise potentially $1 billion.With enviable exposure to two of the largest global sportswear brands and one of the largest sportswear markets in the world, Topsports looks well positioned to benefit from consumers embracing the latest healthy lifestyles, increased sports participation rates and supportive Government policies in China. Overall, we believe that Topsport’s fundamentals offer more positives than negatives.

Topsports International IPO Initiation: No Sweat

Investment Advisors, JL Warren Capital

Junheng Li

Investment Advisors

JL Warren Capital

JL Warren Capital LLC is a leading independent equity research firm focused on Chinese companies and listed multinationals in China. We employ a bottom-up research approach that takes great care to avoid the acquisition of material non-public information. Through investigative due diligence including channel surveys and interviews, our research helps clients to pinpoint the dislocations in the market.

Equity Bottom-Up

Our negative view on <a href="https://www.smartkarma.com/entities/24184" target="_blank" data-smartkarma-citation="entities:24184:1">Baozun Inc. (BZUN US)</a> stems from the company’s declining profit margin due to eroding pricing power to key customers, and chronic negative cash flow despite robust GMV growth.  The root cause of the problem is the strengthening of bargaining power from its key existing clients, as they demand fixed fees, rather than GMV based commission fees as online sales increases.  Many service contracts are renewable each year, and we see a weakening pricing trend as well as a bloated balance sheet as its distribution business re-accelerates growth.  An increasing distribution business sales mix implies rising inventory, which adds strain to working capital.   Unsurprisingly, on April 4th Baozun announced a convertible debt offering of $225M due in 2024, to primarily fund its working capital.

Our negative view on Baozun Inc. (BZUN US) stems from the company’s declining profit margin due to eroding pricing power to key customers, and chronic negative cash flow despite robust GMV growth.  The root cause of the problem is the strengthening of bargaining power from its key existing clients, as they demand fixed fees, rather than GMV based commission fees as online sales increases.  Many service contracts are renewable each year, and we see a weakening pricing trend as well as a bloated balance sheet as its distribution business re-accelerates growth.  An increasing distribution business sales mix implies rising inventory, which adds strain to working capital.   Unsurprisingly, on April 4th Baozun announced a convertible debt offering of $225M due in 2024, to primarily fund its working capital.

BZUN Q1 Preview: Eroding GMV Quality, Margin Squeeze by Top Customers

EURO STOXX 50 Price EUR / Technical Analysis

This report highlights actionable set ups from predominately European, developed markets, and is supportive of our view that Europe is bottoming, a viewpoint that remains far from consensus. Within Europe, we put a spotlight on Germany’s DAX and France’s CAC 40. Today’s recommendations are primarily from cyclical Sectors, however European Consumer Staples also exhibits bottoming RS.

This report highlights actionable set ups from predominately European, developed markets, and is supportive of our view that Europe is bottoming, a viewpoint that remains far from consensus. Within Europe, we put a spotlight on Germany’s DAX and France’s CAC 40. Today’s recommendations are primarily from cyclical Sectors, however European Consumer Staples also exhibits bottoming RS. 

Developed Markets Chart Book: Europe in Focus

Germany

Puma SE designs, manufactures, and sells sporting goods and apparels. The Company produces running, tennis, training, and basketball shoes, as well as t-shirts and accessories. Puma serves customers worldwide.

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Puma (PUM GR)

Global Equity Strategy: Short-Term Bullish Trends Clash With Longer-Term Resistance

For now we view the recent pullback as a countertrend move that helped correct the extended and overbought conditions we noted over the past two...

Vermilion Research

Global Equity Strategy: Still Bullish, But Extended Near-Term

Global equities continue to trend higher following breakouts that have occurred during the past two weeks. Over this timeframe we have been...

Vermilion Research

Topsports International IPO Initiation: No Sweat

Topsports International (TOP HK) is the sportswear division of Belle International. Topsports is the largest sportswear retailer in China as...

Arun George

BZUN Q1 Preview: Eroding GMV Quality, Margin Squeeze by Top Customers

Our negative view on Baozun Inc. (BZUN US) stems from the company’s declining profit margin due to eroding pricing power to key customers, and...

JL Warren Capital

Developed Markets Chart Book: Europe in Focus

This report highlights actionable set ups from predominately European, developed markets, and is supportive of our view that Europe is bottoming, a...

Vermilion Research

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