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

Shanghai Shenzhen CSI 300 Index / Technical Analysis

Global equities (MSCI ACWI, ACWI ex-US, and EAFE) remain bullish with their uptrends intact, and the MSCI Emerging Markets index continues to hold above major support at $52 on the EEM-US. Additionally, Europe’s STOXX 50 and Hong Kong’s Hang Seng are on the cusp of short-term breakouts, while the major indexes in China (Shanghai Composite &amp; CSI 300) are currently breaking above short-term resistance... see chart below. Considering the absence of breakdowns and the fact that market dynamics remain largely positive, our overall constructive outlook remains appropriate.

Global equities (MSCI ACWI, ACWI ex-US, and EAFE) remain bullish with their uptrends intact, and the MSCI Emerging Markets index continues to hold above major support at $52 on the EEM-US. Additionally, Europe’s STOXX 50 and Hong Kong’s Hang Seng are on the cusp of short-term breakouts, while the major indexes in China (Shanghai Composite &amp; CSI 300) are currently breaking above short-term resistance... see chart below. Considering the absence of breakdowns and the fact that market dynamics remain largely positive, our overall constructive outlook remains appropriate.

Chinese Indexes Headed Higher; Actionable Themes: Transportation, Materials, and Services

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

The <a href="https://www.smartkarma.com/entities/nifty-index" target="_blank" data-smartkarma-citation="entities:23617:1" rel="noopener">NIFTY Index (NIFTY INDEX)</a> is the flagship index of the National Stock Exchange of India (NSE). The index has 50 stocks and is a free float weighted market cap index. The next rebalance will be effective after the close of trading on 29 September 2021 and the announcement of the changes will be made four weeks prior to the effective date.More than a third of the way through the review period that runs from February to July, we see one possible change to the index with <a href="https://www.smartkarma.com/entities/info-edge-india-ltd" target="_blank" data-smartkarma-citation="entities:14461:1" rel="noopener">Info Edge India (INFOE IN)</a> replacing <a href="https://www.smartkarma.com/entities/indian-oil-corp-ltd" target="_blank" data-smartkarma-citation="entities:7781:1" rel="noopener">Indian Oil Corp (IOCL IN)</a>. There could be more changes if some large stocks like <a href="https://www.smartkarma.com/entities/adani-green-energy-ltd" target="_blank" data-smartkarma-citation="entities:29012:1" rel="noopener">Adani Green Energy Ltd (ADANIGR IN)</a> and <a href="https://www.smartkarma.com/entities/dmart" target="_blank" data-smartkarma-citation="entities:23656:1" rel="noopener">Avenue Supermarts Ltd (DMART IN)</a> are included in the Futures &amp; Options (F&amp;O) segment of the market.<a href="https://www.smartkarma.com/entities/vedanta-ltd" target="_blank" data-smartkarma-citation="entities:514:1" rel="noopener">Vedanta Ltd (VEDL IN)</a> does not make the cut for index inclusion following the 10% reduction in its free float following the open offer.Passive funds benchmarked to the <a href="https://www.smartkarma.com/entities/nifty-index" target="_blank" data-smartkarma-citation="entities:23617:1" rel="noopener">NIFTY Index (NIFTY INDEX)</a> will need to trade around 3 days of ADV on <a href="https://www.smartkarma.com/entities/info-edge-india-ltd" target="_blank" data-smartkarma-citation="entities:14461:1" rel="noopener">Info Edge India (INFOE IN)</a> and <a href="https://www.smartkarma.com/entities/indian-oil-corp-ltd" target="_blank" data-smartkarma-citation="entities:7781:1" rel="noopener">Indian Oil Corp (IOCL IN)</a>. Plus there will be flow from active funds and from cash and carry baskets on the index.<a href="https://www.smartkarma.com/entities/info-edge-india-ltd" target="_blank" data-smartkarma-citation="entities:14461:1" rel="noopener">Info Edge India (INFOE IN)</a> trades at a valuation premium to its regional peers, while <a href="https://www.smartkarma.com/entities/indian-oil-corp-ltd" target="_blank" data-smartkarma-citation="entities:7781:1" rel="noopener">Indian Oil Corp (IOCL IN)</a> trades at a discount to its domestic peers.The big event to watch for is the potential inclusion of <a href="https://www.smartkarma.com/entities/adani-green-energy-ltd" target="_blank" data-smartkarma-citation="entities:29012:1" rel="noopener">Adani Green Energy Ltd (ADANIGR IN)</a> and <a href="https://www.smartkarma.com/entities/dmart" target="_blank" data-smartkarma-citation="entities:23656:1" rel="noopener">Avenue Supermarts Ltd (DMART IN)</a> in the F&amp;O segment that will open the door for index inclusion.

The NIFTY Index (NIFTY INDEX) is the flagship index of the National Stock Exchange of India (NSE). The index has 50 stocks and is a free float weighted market cap index. The next rebalance will be effective after the close of trading on 29 September 2021 and the announcement of the changes will be made four weeks prior to the effective date.More than a third of the way through the review period that runs from February to July, we see one possible change to the index with Info Edge India (INFOE IN) replacing Indian Oil Corp (IOCL IN). There could be more changes if some large stocks like Adani Green Energy Ltd (ADANIGR IN) and Avenue Supermarts Ltd (DMART IN) are included in the Futures &amp; Options (F&amp;O) segment of the market.Vedanta Ltd (VEDL IN) does not make the cut for index inclusion following the 10% reduction in its free float following the open offer.Passive funds benchmarked to the NIFTY Index (NIFTY INDEX) will need to trade around 3 days of ADV on Info Edge India (INFOE IN) and Indian Oil Corp (IOCL IN). Plus there will be flow from active funds and from cash and carry baskets on the index.Info Edge India (INFOE IN) trades at a valuation premium to its regional peers, while Indian Oil Corp (IOCL IN) trades at a discount to its domestic peers.The big event to watch for is the potential inclusion of Adani Green Energy Ltd (ADANIGR IN) and Avenue Supermarts Ltd (DMART IN) in the F&amp;O segment that will open the door for index inclusion.

NIFTY50 Index Rebalance Preview: Info Edge Could Replace IOC

The <a href="https://www.smartkarma.com/entities/nifty-index" target="_blank" data-smartkarma-citation="entities:23617:1" rel="noopener">NIFTY Index (NIFTY INDEX)</a> is the flagship index of the National Stock Exchange of India (NSE). The index has 50 stocks and is a free float weighted market cap index. The next rebalance will be effective after the close of trading on 25 March and the announcement of the changes will be done four weeks prior to the effective date.We are now almost at the end of the review period. There are 3 stocks that meet the criteria for inclusion in the <a href="https://www.smartkarma.com/entities/nifty-index" target="_blank" data-smartkarma-citation="entities:23617:1" rel="noopener">NIFTY Index (NIFTY INDEX)</a>: <a href="https://www.smartkarma.com/entities/tata-consumer-products" target="_blank" data-smartkarma-citation="entities:258:1" rel="noopener">Tata Consumer Products (TATACONS IN)</a>, <a href="https://www.smartkarma.com/entities/icici-lombard-general-insura" target="_blank" data-smartkarma-citation="entities:25882:1" rel="noopener">Icici Lombard General Insurance Company (ICICIGI IN)</a> and <a href="https://www.smartkarma.com/entities/info-edge-india-ltd" target="_blank" data-smartkarma-citation="entities:14461:1" rel="noopener">Info Edge India (INFOE IN)</a>. The three lowest ranked stocks in the index are <a href="https://www.smartkarma.com/entities/gail-india-ltd" target="_blank" data-smartkarma-citation="entities:15263:1" rel="noopener">Gail India Ltd (GAIL IN)</a>, <a href="https://www.smartkarma.com/entities/indian-oil-corp-ltd" target="_blank" data-smartkarma-citation="entities:7781:1" rel="noopener">Indian Oil Corp (IOCL IN)</a> and <a href="https://www.smartkarma.com/entities/upl-ltd" target="_blank" data-smartkarma-citation="entities:20776:1" rel="noopener">UPL Ltd (UPLL IN)</a>.We see a high probability of <a href="https://www.smartkarma.com/entities/tata-consumer-products" target="_blank" data-smartkarma-citation="entities:258:1" rel="noopener">Tata Consumer Products (TATACONS IN)</a> being included and <a href="https://www.smartkarma.com/entities/gail-india-ltd" target="_blank" data-smartkarma-citation="entities:15263:1" rel="noopener">Gail India Ltd (GAIL IN)</a> being excluded, and a lower probability of <a href="https://www.smartkarma.com/entities/icici-lombard-general-insura" target="_blank" data-smartkarma-citation="entities:25882:1" rel="noopener">Icici Lombard General Insurance Company (ICICIGI IN)</a> being included and <a href="https://www.smartkarma.com/entities/indian-oil-corp-ltd" target="_blank" data-smartkarma-citation="entities:7781:1" rel="noopener">Indian Oil Corp (IOCL IN)</a> being excluded.<a href="https://www.smartkarma.com/entities/info-edge-india-ltd" target="_blank" data-smartkarma-citation="entities:14461:1" rel="noopener">Info Edge India (INFOE IN)</a>'s average free float market cap is less than 1% lower than <a href="https://www.smartkarma.com/entities/icici-lombard-general-insura" target="_blank" data-smartkarma-citation="entities:25882:1" rel="noopener">Icici Lombard General Insurance Company (ICICIGI IN)</a> - can get close going into the tail end of the review period.The index committee has a wide berth when choosing the number of changes to be made and it is highly unlikely that there will be more than 2 changes, especially since a maximum of 5 changes can be made in a year.<a href="https://www.smartkarma.com/entities/dmart" target="_blank" data-smartkarma-citation="entities:23656:1" rel="noopener">Avenue Supermarts (DMART IN)</a> has the highest market cap among non index constituents but is not eligible for index inclusion since there are no listed Futures and Options on the stock, a prerequisite for index inclusion.

The NIFTY Index (NIFTY INDEX) is the flagship index of the National Stock Exchange of India (NSE). The index has 50 stocks and is a free float weighted market cap index. The next rebalance will be effective after the close of trading on 25 March and the announcement of the changes will be done four weeks prior to the effective date.We are now almost at the end of the review period. There are 3 stocks that meet the criteria for inclusion in the NIFTY Index (NIFTY INDEX): Tata Consumer Products (TATACONS IN), Icici Lombard General Insurance Company (ICICIGI IN) and Info Edge India (INFOE IN). The three lowest ranked stocks in the index are Gail India Ltd (GAIL IN), Indian Oil Corp (IOCL IN) and UPL Ltd (UPLL IN).We see a high probability of Tata Consumer Products (TATACONS IN) being included and Gail India Ltd (GAIL IN) being excluded, and a lower probability of Icici Lombard General Insurance Company (ICICIGI IN) being included and Indian Oil Corp (IOCL IN) being excluded.Info Edge India (INFOE IN)'s average free float market cap is less than 1% lower than Icici Lombard General Insurance Company (ICICIGI IN) - can get close going into the tail end of the review period.The index committee has a wide berth when choosing the number of changes to be made and it is highly unlikely that there will be more than 2 changes, especially since a maximum of 5 changes can be made in a year.Avenue Supermarts (DMART IN) has the highest market cap among non index constituents but is not eligible for index inclusion since there are no listed Futures and Options on the stock, a prerequisite for index inclusion.

NIFTY50 Index Rebalance Preview - Nearing The End of the Review Period

Indian Accounting Research Analyst, Trudence Capital Advisors

Nitin Mangal

Indian Accounting Research Analyst

<a href="https://www.smartkarma.com/entities/vedanta-ltd" target="_blank" data-smartkarma-citation="entities:514:1" rel="noopener">Vedanta Ltd (VEDL IN)</a>'s delisting has been one of the hot topics for the last couple of weeks given it approached the timeline for the reverse book building issue that was approved by its shareholders. However, the delisting event has deemed to have been failed according to the announcement filed by the company on October 10th. As a result, the stock had crashed by over 20% on Monday.This insight does not engage in the technicalities of the delisting, but rather we try to dwell on the increasing visibility of the shareholder activism in the country, one of the factors opposing the delisting in the first place.

Vedanta Ltd (VEDL IN)'s delisting has been one of the hot topics for the last couple of weeks given it approached the timeline for the reverse book building issue that was approved by its shareholders. However, the delisting event has deemed to have been failed according to the announcement filed by the company on October 10th. As a result, the stock had crashed by over 20% on Monday.This insight does not engage in the technicalities of the delisting, but rather we try to dwell on the increasing visibility of the shareholder activism in the country, one of the factors opposing the delisting in the first place.

Vedanta Delisting Failure: The Upsurge of Shareholder Activism in India?

Thematic (Sector/Industry)

The COVID-19 crisis in India is surmounting as the number of tests and positive cases each day are reaching new highs while the peak has not reached yet, as discussed in <a href="https://www.smartkarma.com/insights/covid-19-how-does-india-fare-currently" target="_blank" data-smartkarma-citation="insights:38227" rel="noopener">COVID-19: How Does India Fare Currently?</a> Unsurprisingly, the government has extended the nation-wide lockdown to a further 19 days till May 3rd. While the extension was anticipated by many, the government has also decided to free up some economic activities post 20th April, subject to certain criteria (the guideline is embedded in the insight). Post the extension announcement, the government had segregated 700+ districts into hotspots, non-hotspots and green zones; it is green zones are where certain economic activities will resume on 20th April. In this insight, we try to decipher the possible beneficiaries arising from this 'free-up'

The COVID-19 crisis in India is surmounting as the number of tests and positive cases each day are reaching new highs while the peak has not reached yet, as discussed in COVID-19: How Does India Fare Currently? Unsurprisingly, the government has extended the nation-wide lockdown to a further 19 days till May 3rd. While the extension was anticipated by many, the government has also decided to free up some economic activities post 20th April, subject to certain criteria (the guideline is embedded in the insight). Post the extension announcement, the government had segregated 700+ districts into hotspots, non-hotspots and green zones; it is green zones are where certain economic activities will resume on 20th April. In this insight, we try to decipher the possible beneficiaries arising from this 'free-up'

COVID-19 : Intermediate Respite for Some Businesses

India

UPL Ltd. manufactures, distributes and exports off-patent agrochemicals. The Company also manufactures phosphorus & phosphorus-based compounds and its products include herbicides, fungicides, insecticides, fumigants and rodenticides. United Phosphorus also manufactures industrial chemicals, specialty chemicals and chloralkaline products

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UPL Ltd (UPLL IN)

Chinese Indexes Headed Higher; Actionable Themes: Transportation, Materials, and Services

The evidence continues to suggest that value remains leadership and we recommend adding exposure to cyclical value on this minor pullback in the...

Vermilion Research

NIFTY50 Index Rebalance Preview: Info Edge Could Replace IOC

We see one potential changes to the NIFTY50 index at the September review. Adani Green and Avenue Supermarts could join the index if listed F&O are...

Brian Freitas

NIFTY50 Index Rebalance Preview - Nearing The End of the Review Period

There is just over a week remaining in the review period. We expect TATACONS to replace GAIL, and see a low probability of ICICIGI replacing IOCL....

Brian Freitas

Vedanta Delisting Failure: The Upsurge of Shareholder Activism in India?

Vedanta's delisting failure has led us to believe that shareholder activism, which was once muted, has taken an emerging path in India. We also...

Nitin Mangal

COVID-19 : Intermediate Respite for Some Businesses

The COVID-19 crisis in India is surmounting as the number of tests and positive cases each day are reaching new highs while the peak has not...

Nitin Mangal

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