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

In our October 1 Int’l Compass we highlighted our belief that the lows were in place for this recent correction and that, combined with mostly healthy market dynamics, a bullish outlook is appropriate if the MSCI ACWI (ACWI-US) is above $77 support and, if the MSCI EM (EEM-US) is above $42.30 support. These indexes and market dynamics have only improved since October 1. As a result, our outlook remains bullish and we continue to believe that the path of least resistance is higher for global equities. Below we summarize the basis for our bullish outlook. Open the attached file to read our complete International Strategy document, and to find links to detailed comments and recommendations for each of our 12 Sectors.

In our October 1 Int’l Compass we highlighted our belief that the lows were in place for this recent correction and that, combined with mostly healthy market dynamics, a bullish outlook is appropriate if the MSCI ACWI (ACWI-US) is above $77 support and, if the MSCI EM (EEM-US) is above $42.30 support. These indexes and market dynamics have only improved since October 1. As a result, our outlook remains bullish and we continue to believe that the path of least resistance is higher for global equities. Below we summarize the basis for our bullish outlook. Open the attached file to read our complete International Strategy document, and to find links to detailed comments and recommendations for each of our 12 Sectors.

Global Equity Strategy: Bullish Outlook Intact

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Last Week in Event SPACE: Vedanta, Evergrande Auto, Cocokara, Leyou, Mitsu Lease/Hitachi Cap

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

The <a href="https://www.smartkarma.com/entities/tata-motors-ltd-a-dvr" target="_blank" data-smartkarma-citation="entities:349:1" rel="noopener">Tata Motors DVR (TTMT/A IN)</a> line traded at a record 66% discount to the common shares <a href="https://www.smartkarma.com/entities/tata-motors-ltd" target="_blank" data-smartkarma-citation="entities:216:1" rel="noopener">Tata Motors Ltd (TTMT IN)</a> at the beginning of August. Since then, the discount has narrowed to 55.75% with the Differential Voting Rights (DVR) line outperforming the common shares by 32%.With Tata Sons buying the DVR line in the market, the free float of the DVR line continues to decrease and will result in a tighter discount to the common shares. The DVR buying also send a signal to the market that Tata Sons will buy the DVR when the stock price drops too much or the discount widens too much. Increased buying from passive funds recently will also lead to a lower real world float and help contain the discount around these levels.Recent trading activity has shown a higher number of shares marked for delivery as a percentage of traded volume, accompanied by a tightening discount, indicating positions are gradually being accumulated. We feel the discount could tighten further from here.

The Tata Motors DVR (TTMT/A IN) line traded at a record 66% discount to the common shares Tata Motors Ltd (TTMT IN) at the beginning of August. Since then, the discount has narrowed to 55.75% with the Differential Voting Rights (DVR) line outperforming the common shares by 32%.With Tata Sons buying the DVR line in the market, the free float of the DVR line continues to decrease and will result in a tighter discount to the common shares. The DVR buying also send a signal to the market that Tata Sons will buy the DVR when the stock price drops too much or the discount widens too much. Increased buying from passive funds recently will also lead to a lower real world float and help contain the discount around these levels.Recent trading activity has shown a higher number of shares marked for delivery as a percentage of traded volume, accompanied by a tightening discount, indicating positions are gradually being accumulated. We feel the discount could tighten further from here.

Tata Motors DVR: Discount to Common Shares Should Tighten Further

Last Week In Event SPACE: Line Corp, Esprit, Sembcorp Ind, Car Inc, Accordia Golf, Skyworth, JCNC

The <a href="https://www.smartkarma.com/entities/tata-motors-ltd-a-dvr" target="_blank" data-smartkarma-citation="entities:349:1" rel="noopener">Tata Motors DVR (TTMT/A IN)</a> discount to the common shares <a href="https://www.smartkarma.com/entities/tata-motors-ltd" target="_blank" data-smartkarma-citation="entities:216:1" rel="noopener">Tata Motors Ltd (TTMT IN)</a> has blown out to 62%. This comes at a time when the lockdown in India has decimated auto sales and the stock price continues to languish near multi-year lows, though higher than the lows it hit in March.After reaching a discount of 60% late February, the discount contracted to 47% mid March as Tata Sons started to buy the Differential Voting Rights (DVR) for the first time ever. Since then, the discount has slipped back to its previous lows and beyond.The difference in the liquidity of the two lines could be an important factor in driving the discount to historical wide levels.In this Insight, we relook the discount over time, the shareholding pattern of the DVRs and at some catalysts that could narrow the discount.

The Tata Motors DVR (TTMT/A IN) discount to the common shares Tata Motors Ltd (TTMT IN) has blown out to 62%. This comes at a time when the lockdown in India has decimated auto sales and the stock price continues to languish near multi-year lows, though higher than the lows it hit in March.After reaching a discount of 60% late February, the discount contracted to 47% mid March as Tata Sons started to buy the Differential Voting Rights (DVR) for the first time ever. Since then, the discount has slipped back to its previous lows and beyond.The difference in the liquidity of the two lines could be an important factor in driving the discount to historical wide levels.In this Insight, we relook the discount over time, the shareholding pattern of the DVRs and at some catalysts that could narrow the discount.

India

Tata Motors Limited manufactures cars and commercial automotive vehicles in India. The Company designs, manufactures and sells heavy commercial, medium commercial and small commercial vehicles including trucks, tankers, vans, buses, ambulances and minibuses. Tata also manufactures small cars and sports utility vehicles.

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Tata Motors ADR (TTM US)

Global Equity Strategy: Bullish Outlook Intact

Read our complete International Strategy document to find detailed comments and recommendations for each of our 12 Sectors.

Vermilion Research

Last Week in Event SPACE: Vedanta, Evergrande Auto, Cocokara, Leyou, Mitsu Lease/Hitachi Cap

Last Week in Event SPACE ... Plus, other events, CCASS movements and Mood Spins. (This insight covers specific insights & comments...

David Blennerhassett

Tata Motors DVR: Discount to Common Shares Should Tighten Further

The Tata Motors DVR (TTMT/A IN) traded at an all time l

Brian Freitas

Last Week In Event SPACE: Line Corp, Esprit, Sembcorp Ind, Car Inc, Accordia Golf, Skyworth, JCNC

Last Week in Event SPACE ... There is a built-in ability, nay prerogative, for the companies involved in LINE Corp (3938 JP) to go get a...

David Blennerhassett

Tata Motors DVR: Discount Blows Out

The Tata Motors DVR (TTMT/A IN) discount to the common shares Tata Motors Ltd (TTMT IN) has blown out to 62%. This comes at a time when the...

Brian Freitas

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