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 MSCI ACWI ETF / Technical Analysis

<ul>
<li>Global equities under pressure; we discussed in our August 3,2023 <em>Int'l Compass</em> how it could be the start of a ~15% pullback in $ACWI, which would put it at $84-$85.</li>
<li>We also discussed how it is possible that this is a normal 3%-6% pullback to the major $93 support level (which it tested today).</li>
<li>If the 10-year Treasury yield and DXY remain below their respective resistance levels, we remain buyers on this pullback to $93 on ACWI-US.</li>
</ul>


Global equities under pressure; we discussed in our August 3,2023 Int'l Compass how it could be the start of a ~15% pullback in $ACWI, which would put it at $84-$85.
We also discussed how it is possible that this is a normal 3%-6% pullback to the major $93 support level (which it tested today).
If the 10-year Treasury yield and DXY remain below their respective resistance levels, we remain buyers on this pullback to $93 on ACWI-US.


10-Yr Treasury Yield and DXY at Key Inflection Points; $ACWI Testing $93; Energy/HC/Tech/CD Buys

Oil & Natural Gas Corp / Technical Analysis

<ul>
<li>MSCI EM (EEM-US) continues to show signs of bottoming as it has held above our $37-$37.50 line-in-the-sand. </li>
<li>Major 1+ year resistance on the EEM-US is at $42, and a breakout would mean the bottom is in (and would be a buy signal).</li>
<li>Favor EM over EAFE due to 2.5-year downtrend reversal in the EAFE vs. EM ratio. Top Overweights: Taiwan, India, Greece; Attractive EM Sectors: Energy, Technology, Consumer Discretionary, Financials</li>
</ul>


MSCI EM (EEM-US) continues to show signs of bottoming as it has held above our $37-$37.50 line-in-the-sand. 
Major 1+ year resistance on the EEM-US is at $42, and a breakout would mean the bottom is in (and would be a buy signal).
Favor EM over EAFE due to 2.5-year downtrend reversal in the EAFE vs. EM ratio. Top Overweights: Taiwan, India, Greece; Attractive EM Sectors: Energy, Technology, Consumer Discretionary, Financials


MSCI Emerging Market Index Testing 1+ Year Resistance; Favor EM over EAFE; Top EM Buys Highlighted

Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

Sun Pharmaceutical Industries / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/sun-pharmaceutical-industries-limited" target="_blank" data-smartkarma-citation="entities:98:1" rel="noopener">Sun Pharmaceutical Industries (SUNP IN)</a> reported 11% YoY revenue growth to INR118B in Q1FY24, mainly driven by the U.S. business. EBITDA margin expanded 109bps to 27.9%.</li>
<li>Net profit declined 2% YoY to INR20B due to certain one-off charges amounting to INR3B. Excluding the exceptional items, adjusted net profit grew 14% YoY to INR23B.</li>
<li>With 26 marketed products globally, Sun Pharma is betting big on specialty products. Specialty pipeline includes 5 molecules undergoing clinical trials. Specialty R&amp;D accounts for 35% of total R&amp;D spends.</li>
</ul>



Sun Pharmaceutical Industries (SUNP IN) reported 11% YoY revenue growth to INR118B in Q1FY24, mainly driven by the U.S. business. EBITDA margin expanded 109bps to 27.9%.
Net profit declined 2% YoY to INR20B due to certain one-off charges amounting to INR3B. Excluding the exceptional items, adjusted net profit grew 14% YoY to INR23B.
With 26 marketed products globally, Sun Pharma is betting big on specialty products. Specialty pipeline includes 5 molecules undergoing clinical trials. Specialty R&amp;D accounts for 35% of total R&amp;D spends.


Sun Pharmaceutical (SUNP IN): Q1 Profit Falls Due to One-Off Expenses; Double-Digit Revenue Growth

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

Event-Driven

<ul>
<li>Using the current index methodology throws up 5 changes for the <a href="https://www.smartkarma.com/entities/nse-nifty-next-50-index" target="_blank" data-smartkarma-citation="entities:36053:1" rel="noopener">NSE Nifty Next 50 Index (NIFTYJR INDEX)</a> in September. Turnover will be BIG.</li>
<li>Using the proposed index methodology throws up 11 changes for the <a href="https://www.smartkarma.com/entities/nse-nifty-next-50-index" target="_blank" data-smartkarma-citation="entities:36053:1" rel="noopener">NSE Nifty Next 50 Index (NIFTYJR INDEX)</a> in September. Turnover will be HUGE.</li>
<li>The market consultation being put on hold could indicate pushback from index users or the possibility of F&amp;O contracts being introduced on some of the non-F&amp;O index constituents.</li>
</ul>


Using the current index methodology throws up 5 changes for the NSE Nifty Next 50 Index (NIFTYJR INDEX) in September. Turnover will be BIG.
Using the proposed index methodology throws up 11 changes for the NSE Nifty Next 50 Index (NIFTYJR INDEX) in September. Turnover will be HUGE.
The market consultation being put on hold could indicate pushback from index users or the possibility of F&amp;O contracts being introduced on some of the non-F&amp;O index constituents.


NIFTY/NEXT50 Index Rebalance Preview: Loads of Changes if Proposed Methodology Is Implemented

Dr. Reddy's Laboratories / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/dr-reddy-s-laboratories-ltd" target="_blank" data-smartkarma-citation="entities:16406:1" rel="noopener">Dr. Reddy's Laboratories (DRRD IN)</a> started FY24 on a strong note, with Q1FY24 revenue and net profit growing 29% and 18%, YoY, respectively, driven by North America generics business.</li>
<li>Revenue from North America generics increased 79% y/y and 26% q/q to INR32 billion, driven by new product launches, continued momentum in existing products, and favorable forex rates movement.</li>
<li>During Q1FY24, the company has launched six new products in the U.S. With a rich ANDA pipeline of 85 ANDAs, launch momentum is expected to accelerate in the current fiscal.</li>
</ul>



Dr. Reddy's Laboratories (DRRD IN) started FY24 on a strong note, with Q1FY24 revenue and net profit growing 29% and 18%, YoY, respectively, driven by North America generics business.
Revenue from North America generics increased 79% y/y and 26% q/q to INR32 billion, driven by new product launches, continued momentum in existing products, and favorable forex rates movement.
During Q1FY24, the company has launched six new products in the U.S. With a rich ANDA pipeline of 85 ANDAs, launch momentum is expected to accelerate in the current fiscal.


Dr. Reddy's Laboratories (DRRD IN): Q1FY24 Result- US Business Shines; PAT Jumps 18%

India

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.

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Sun Pharmaceutical Industries (SUNP IN)

10-Yr Treasury Yield and DXY at Key Inflection Points; $ACWI Testing $93; Energy/HC/Tech/CD Buys

Test of Key Supports: $93 on $ACWI, $47.50 on $ACWX, $70 on $EFA, 4200 on EURO $STOXX 50. As long as 10-Yr Treasury Yield $TNX and $DXY remain...

Vermilion Research

MSCI Emerging Market Index Testing 1+ Year Resistance; Favor EM over EAFE; Top EM Buys Highlighted

MSCI EM Index $EEM Testing 1+ Year Resistance; Favor EM over EAFE $EFA. Top EM Country Overweights: Taiwan, India, Greece; Attractive EM Sectors:...

Vermilion Research

Sun Pharmaceutical (SUNP IN): Q1 Profit Falls Due to One-Off Expenses; Double-Digit Revenue Growth

Sun Pharma reported 11% sales growth to INR118B in Q1, driven by the US business. Net profit declined 2% to INR20B due to one-off charges....

Tina Banerjee

NIFTY/NEXT50 Index Rebalance Preview: Loads of Changes if Proposed Methodology Is Implemented

There could be 5 changes with the current methodology or 11 with the proposed methodology. Turnover will be big in both cases. There is a lot of...

Brian Freitas

Dr. Reddy's Laboratories (DRRD IN): Q1FY24 Result- US Business Shines; PAT Jumps 18%

North America sales grew 79% y/y and 26% q/q to INR32 billion, driven by new product launches, continued momentum in existing products, favorable...

Tina Banerjee

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