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

iShares Russell 2000 ETF / Technical Analysis

<ul>
<li>The market continues to send mixed signals - some neutral or healthy signals but some risk-off signals as well.</li>
<li>As long as the Russell 2000 index (IWM) is above $208, Russell Micro Cap index (IWC) is above $134-$135, and the S&amp;P 500 is above 4495, we cannot be bearish.</li>
<li>Treasury yields are not breaking down below 1.40%-1.45% support on the 10-year Treasury yield and 1.76% support on the 30-year Treasury yield.</li>
</ul>


The market continues to send mixed signals - some neutral or healthy signals but some risk-off signals as well.
As long as the Russell 2000 index (IWM) is above $208, Russell Micro Cap index (IWC) is above $134-$135, and the S&amp;P 500 is above 4495, we cannot be bearish.
Treasury yields are not breaking down below 1.40%-1.45% support on the 10-year Treasury yield and 1.76% support on the 30-year Treasury yield.


Continued Absence Of Breakdowns Is A Positive Sign; Many Bottoms-Up Stock Recommendations

Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

<ul>
<li>With multiple mutations, Omicron may require modifications in the existing vaccines. With fast mover advantage and superior efficacy, <a href="https://www.smartkarma.com/entities/moderna-inc" target="_blank" data-smartkarma-citation="entities:28744:1" rel="noopener">Moderna Inc (MRNA US)</a> seems to be a clear winner of the situation.</li>
<li>Moderna’s current expectation to deliver 2–3 billion doses in 2022 is likely to be revised upwards with the fast spread of Omicron vaccine and full approval of booster doses.</li>
<li>Moderna shares have reasonable valuation compared to its peers. Higher visibility into 2022 and beyond will lead to re-rating opportunity.</li>
</ul>


With multiple mutations, Omicron may require modifications in the existing vaccines. With fast mover advantage and superior efficacy, Moderna Inc (MRNA US) seems to be a clear winner of the situation.
Moderna’s current expectation to deliver 2–3 billion doses in 2022 is likely to be revised upwards with the fast spread of Omicron vaccine and full approval of booster doses.
Moderna shares have reasonable valuation compared to its peers. Higher visibility into 2022 and beyond will lead to re-rating opportunity.


Moderna (MRNA US): To Cash in on Omicron Fear

Thematic (Sector/Industry)

<ul>
<li>New Covid cases across the world is surging. New Covid-19 variant found in South Africa and Botswana is adding to fears.</li>
<li>This will bring the focus back to molecular diagnostic companies due to increasing demand for Covid testing.</li>
<li>We have listed few global diagnostic companies, which should benefit from this backdrop.</li>
</ul>


New Covid cases across the world is surging. New Covid-19 variant found in South Africa and Botswana is adding to fears.
This will bring the focus back to molecular diagnostic companies due to increasing demand for Covid testing.
We have listed few global diagnostic companies, which should benefit from this backdrop.


New Covid Variant Raises Fear: Stocks to Own to Buck the Trend

Shares of Seegene (096530 KS) are trading near 52-week low. The company is reporting sequential decline in revenue due to decelerating COVID-19 PCR testing volume in European countries prior to the unexpected virus variants outbreak. Such continuous uncertainties may have resulted inventory burdens on customer end and affected to performance of Q2. Meanwhile, the proportion of COVID testing reagents sales over the total sales has been dropped to 65% in H1 2021 from 67% in 2020. However, new COVID-19 cases, especially delta variant are steadily increasing in Europe since Q3. The trend continues in early Q4 also. This may lead to a rebound in COVID-19 reagent revenue for Seegene. Management expects as demand for screenings increases in Asian countries including South Korea, Latin America, and Europe, where COVID-19 cases are growing exponentially due to the delta variant, sales in Q3 are expected to surpass that of Q2. Early trends from other global COVID testing majors enhance our conviction on COVID-19 testing revenue recovery.

Shares of Seegene (096530 KS) are trading near 52-week low. The company is reporting sequential decline in revenue due to decelerating COVID-19 PCR testing volume in European countries prior to the unexpected virus variants outbreak. Such continuous uncertainties may have resulted inventory burdens on customer end and affected to performance of Q2. Meanwhile, the proportion of COVID testing reagents sales over the total sales has been dropped to 65% in H1 2021 from 67% in 2020. However, new COVID-19 cases, especially delta variant are steadily increasing in Europe since Q3. The trend continues in early Q4 also. This may lead to a rebound in COVID-19 reagent revenue for Seegene. Management expects as demand for screenings increases in Asian countries including South Korea, Latin America, and Europe, where COVID-19 cases are growing exponentially due to the delta variant, sales in Q3 are expected to surpass that of Q2. Early trends from other global COVID testing majors enhance our conviction on COVID-19 testing revenue recovery.  

Seegene (096530 KS): Worst Seems to Be Over; Non-COVID Revenue to Dictate Long-Term Growth

Alpha-Centric ESG Research

Kyle Rudden

U.S. President-Elect Joe Biden recently announced four "Day One" priorities for his administration. The first of those priorities is an aggressive seven-point COVID-19 response plan, the first point of which is COVID-19 testing. Testing is Biden's near-term focus, and testing stocks stand to gain.As noted in <a href="https://www.smartkarma.com/insights/biden-covid-19-response-plan-overview-of-its-inherent-investment-themes" target="_blank" data-smartkarma-citation="insights:45631" rel="noopener">Biden COVID-19 Response Plan: Overview of Its Inherent Investment Themes</a>, testing stocks represent the largest, most tangible, and nearest-term investment opportunity amongst the various themes inherent in Biden's COVID-19 plan (summarised in the Insight linked to above).Don't just back up the truck, however. The plan could be boon for testing stocks,  but it is harldy a "rising tide lifts all boats" scenario. It creates a window of upside for some of testing stocks, though not all, and it's a brief window replete with nuances and caveats. Selectivity and timing are key.This Insight presents an investment thesis for the COVID-19 testing stock theme, specifically vis-à-vis the details of the plan. It consists of two phases (time horizons), and two types of stocks:<ol>
<li>
Nearer-Term: Focus on diagnostic (versus antibody) testing stocks, especially those whose tests have fit best with Biden's "rapid deployment, rapid results" testing strategy. For example, rapid antigent tests, others with fast time-to-results, point-of-care and at-home collection, etc.</li>
<li>
Medium-Term: COVID-19 vaccine progress is a major catalyst for this theme. Vaccines will not end testing altogether (at least not soon), but as mass-vaccination becomes more reality than a dream, it would be wise to shift out of from diagnostic stocks into antibody testing stocks.</li>
</ol>

U.S. President-Elect Joe Biden recently announced four "Day One" priorities for his administration. The first of those priorities is an aggressive seven-point COVID-19 response plan, the first point of which is COVID-19 testing. Testing is Biden's near-term focus, and testing stocks stand to gain.As noted in Biden COVID-19 Response Plan: Overview of Its Inherent Investment Themes, testing stocks represent the largest, most tangible, and nearest-term investment opportunity amongst the various themes inherent in Biden's COVID-19 plan (summarised in the Insight linked to above).Don't just back up the truck, however. The plan could be boon for testing stocks,  but it is harldy a "rising tide lifts all boats" scenario. It creates a window of upside for some of testing stocks, though not all, and it's a brief window replete with nuances and caveats. Selectivity and timing are key.This Insight presents an investment thesis for the COVID-19 testing stock theme, specifically vis-à-vis the details of the plan. It consists of two phases (time horizons), and two types of stocks:

Nearer-Term: Focus on diagnostic (versus antibody) testing stocks, especially those whose tests have fit best with Biden's "rapid deployment, rapid results" testing strategy. For example, rapid antigent tests, others with fast time-to-results, point-of-care and at-home collection, etc.

Medium-Term: COVID-19 vaccine progress is a major catalyst for this theme. Vaccines will not end testing altogether (at least not soon), but as mass-vaccination becomes more reality than a dream, it would be wise to shift out of from diagnostic stocks into antibody testing stocks.


Biden COVID-19 Response Plan: Its Largest Near-Term Opportunity Is In Testing Stocks

United States

QuidelOrtho Corporation provides health care services. The Company offers technologies and platforms to benefit customers with expanded access to clinical chemistry, immunoassay, molecular diagnostics, immunohematology, donor screening, and point-of-care diagnostics offerings.

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QuidelOrtho (QDEL US)

Continued Absence Of Breakdowns Is A Positive Sign; Many Bottoms-Up Stock Recommendations

As long as the Russell 2000 index (IWM) is above $208, the Russell Micro Caps index (IWC) is above $134-$135, and the S&P 500 is above 4495, we...

Vermilion Research

Moderna (MRNA US): To Cash in on Omicron Fear

Moderna is set to fly high on the continuous increasing demand for its Covid vaccine and rich pipeline beyond Covid. Emerging Omicron variant is...

Tina Banerjee

New Covid Variant Raises Fear: Stocks to Own to Buck the Trend

Amidst the rising fear for the new Covid variant, investors can focus on molecular diagnostic stocks, as testing demand will be increasing again.

Tina Banerjee

Seegene (096530 KS): Worst Seems to Be Over; Non-COVID Revenue to Dictate Long-Term Growth

Seegene is expected to see COVID testing revenue recovery in H2, driven by surging delta variants in Europe and some Asian countries. Non-COVID...

Tina Banerjee

Biden COVID-19 Response Plan: Its Largest Near-Term Opportunity Is In Testing Stocks

COVID-19 testing stocks represent the largest, most tangible, and nearest-term investment opportunity inherent in Biden's recently-announced COVID...

Kyle Rudden

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