Global Mobility/Transport, Equity Long-Short

Mohshin Aziz

Event-Driven

<ul>
<li>The surprise US$1.9 billion acquisition of <a href="https://www.smartkarma.com/entities/hawaiian-holdings-inc" target="_blank" data-smartkarma-citation="entities:8296:1" rel="noopener">Hawaiian Holdings (HA US)</a> by <a href="https://www.smartkarma.com/entities/alaska-air-group-inc" target="_blank" data-smartkarma-citation="entities:19543:1" rel="noopener">Alaska Air Group (ALK US)</a> could potentially rerate the U.S. airline sector </li>
<li>
<a href="https://www.smartkarma.com/entities/us-global-jets-etf" target="_blank" data-smartkarma-citation="entities:32756:1" rel="noopener">US Global Jets ETF (JETS US)</a> is up 16% from our initiation on 13 November, a mere 5% to our target price of US$19</li>
<li>We advocate to take profits and square this trade in the upcoming days</li>
</ul>


The surprise US$1.9 billion acquisition of Hawaiian Holdings (HA US) by Alaska Air Group (ALK US) could potentially rerate the U.S. airline sector 

US Global Jets ETF (JETS US) is up 16% from our initiation on 13 November, a mere 5% to our target price of US$19
We advocate to take profits and square this trade in the upcoming days


JETS US Equity: Takeoff Accomplished, Time to Return to Base

Thematic (Sector/Industry)

<ul>
<li>We mapped the impact of Russia-Ukraine war on aviation companies and compared it against the current Israel-Hamas war. The trends are uncannily similar </li>
<li>Downside pressure lasts for two weeks, followed by a recovery. This suggests good short-term trading opportunities  </li>
<li>Stocks that exhibits deep value are <a href="https://www.smartkarma.com/entities/us-global-jets-etf" target="_blank" data-smartkarma-citation="entities:32756:1" rel="noopener">US Global Jets ETF (JETS US)</a>, <a href="https://www.smartkarma.com/entities/grupo-aeroportuario-cen-adr" target="_blank" data-smartkarma-citation="entities:28565:1" rel="noopener">Grupo Aeroportuario Cen-Adr (OMAB US), </a><a href="https://www.smartkarma.com/entities/grupo-aeroport-del-sureste-b" target="_blank" data-smartkarma-citation="entities:27377:1" rel="noopener">Grupo Aeroport Del Sureste-B (ASURB MM), and Aeroportua Del Pacifica (GAPB MM)</a>
</li>
</ul>


We mapped the impact of Russia-Ukraine war on aviation companies and compared it against the current Israel-Hamas war. The trends are uncannily similar 
Downside pressure lasts for two weeks, followed by a recovery. This suggests good short-term trading opportunities  
Stocks that exhibits deep value are US Global Jets ETF (JETS US), Grupo Aeroportuario Cen-Adr (OMAB US), Grupo Aeroport Del Sureste-B (ASURB MM), and Aeroportua Del Pacifica (GAPB MM)



The Cockpit View: The Effect of War and Geopolitics on Aviation Companies

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

<ul>
<li>Considering constructive market dynamics and the recent $SPX breakout above 5783 following several months of consolidation, we upgraded our outlook to bullish as of our 10/15/24 U.S. Macro Vision report</li>
<li>Since late-July, we have been neutral on the SPX, preferring to buy near 5100-5200 support and sell near 5670-5783 resistance until there is a break in either direction.</li>
<li>The verdict of the market is the only one that matters, and the breakout above 5783 is the market's way of saying the path of least resistance is higher.</li>
</ul>


Considering constructive market dynamics and the recent $SPX breakout above 5783 following several months of consolidation, we upgraded our outlook to bullish as of our 10/15/24 U.S. Macro Vision report
Since late-July, we have been neutral on the SPX, preferring to buy near 5100-5200 support and sell near 5670-5783 resistance until there is a break in either direction.
The verdict of the market is the only one that matters, and the breakout above 5783 is the market's way of saying the path of least resistance is higher.


Bullish Outlook Focused on Large- And Mid-Caps; Russell 2000 Below Resistance; Concerns Dwindling

<ul>
<li>In spite of last week's hotter-than-expected inflation reports, the Russell 2000 (IWM) outperformed relative to the SPX and QQQ, and ended the week at YTD weekly closing highs.</li>
<li>The fact that small- and mid-caps outperformed during a week with two hot inflation reports is a sign we could see more outperformance in the weeks/months ahead.</li>
<li>Adding to the risk-on theme, the DXY displays a false breakout at $104.60-$104.70. Our bullish outlook that we have had since early November 2023 remains intact. </li>
</ul>


In spite of last week's hotter-than-expected inflation reports, the Russell 2000 (IWM) outperformed relative to the SPX and QQQ, and ended the week at YTD weekly closing highs.
The fact that small- and mid-caps outperformed during a week with two hot inflation reports is a sign we could see more outperformance in the weeks/months ahead.
Adding to the risk-on theme, the DXY displays a false breakout at $104.60-$104.70. Our bullish outlook that we have had since early November 2023 remains intact. 


Small Caps Outperform Despite "Hot" Inflation Reports; Equal-Weighted S&P 500 Breakout

<ul>
<li>Large-Cap indexes (S&amp;P 500, Nasdaq 100) remain bullish, finding support at their respective 20-day MAs since November 2023, and we remain bullish</li>
<li>The question is whether that will continue to be the case. Concerns are rising Treasury yields and the U.S. dollar (DXY), which have broken above short-term resistance levels on Feb13</li>
<li>Friday's PPI report should provide more clarity as to how concerned we should be about rising inflation</li>
</ul>


Large-Cap indexes (S&amp;P 500, Nasdaq 100) remain bullish, finding support at their respective 20-day MAs since November 2023, and we remain bullish
The question is whether that will continue to be the case. Concerns are rising Treasury yields and the U.S. dollar (DXY), which have broken above short-term resistance levels on Feb13
Friday's PPI report should provide more clarity as to how concerned we should be about rising inflation


S&P 500 and Nasdaq 100 Testing 20-Day MAs; 10-Yr Treasury Yield Testing Critical 4.35% Resistance

United States

US Global Jets ETF is an exchange-traded fund incorporated in the USA. The Fund tracks a smart beta Index composed of common stocks of U.S. and international passenger airlines, aircraft manufacturers, airports, and terminal services companies listed on well-developed securities exchanges across the globe. The Index may include small, mid, and large capitalization companies.

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US Global Jets ETF (JETS US)

JETS US Equity: Takeoff Accomplished, Time to Return to Base

Alaska Air Group's acquisition of Hawaiian Holdings reshapes US airline sector; US Global Jets ETF nears target price, suggesting it's time to...

Mohshin Aziz

The Cockpit View: The Effect of War and Geopolitics on Aviation Companies

Comparing the impact of the Russia-Ukraine war on aviation companies to the current Israel-Hamas war reveals similar trends, suggesting trading...

Mohshin Aziz

Bullish Outlook Focused on Large- And Mid-Caps; Russell 2000 Below Resistance; Concerns Dwindling

Bullish Outlook Focused on Large- and Mid-Caps $SPX $NDX $QQQ $IJH $MDY $IWR as of the Oct 11 close above 5783; Russell 2000 $IWM Still Below...

Vermilion Research

Small Caps Outperform Despite "Hot" Inflation Reports; Equal-Weighted S&P 500 Breakout

Small Caps $IWM $VXF Outperform Despite "Hot" Inflation Reports; Equal-Weighted S&P 500 $RSP Breakout; U.S. Dollar $DXY Failed Breakout at $104.70;...

Vermilion Research

S&P 500 and Nasdaq 100 Testing 20-Day MAs; 10-Yr Treasury Yield Testing Critical 4.35% Resistance

$SPX and Nasdaq 100 $QQQ testing 20-day MAs (support since November); We remain bullish, but can't rule out a pullback to 4800-4850 on SPX; 10-Yr...

Vermilion Research

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

JETS US Equity: Takeoff Accomplished, Time to Return to Base

​Alaska Air Group's acquisition of Hawaiian Holdings reshapes US airline sector; US Global Jets ETF nears target price, suggesting it's time to...

Mohshin Aziz

The Cockpit View: The Effect of War and Geopolitics on Aviation Companies

​Comparing the impact of the Russia-Ukraine war on aviation companies to the current Israel-Hamas war reveals similar trends, suggesting trading...

Mohshin Aziz

Bullish Outlook Focused on Large- And Mid-Caps; Russell 2000 Below Resistance; Concerns Dwindling

Bullish Outlook Focused on Large- and Mid-Caps $SPX $NDX $QQQ $IJH $MDY $IWR as of the Oct 11 close above 5783; Russell 2000 $IWM Still Below...

Vermilion Research

Small Caps Outperform Despite "Hot" Inflation Reports; Equal-Weighted S&P 500 Breakout

Small Caps $IWM $VXF Outperform Despite "Hot" Inflation Reports; Equal-Weighted S&P 500 $RSP Breakout; U.S. Dollar $DXY Failed Breakout at $104.70;...

Vermilion Research

S&P 500 and Nasdaq 100 Testing 20-Day MAs; 10-Yr Treasury Yield Testing Critical 4.35% Resistance

$SPX and Nasdaq 100 $QQQ testing 20-day MAs (support since November); We remain bullish, but can't rule out a pullback to 4800-4850 on SPX; 10-Yr...

Vermilion Research

Alaska Air Group's acquisition of Hawaiian Holdings reshapes US airline sector; US Global Jets ETF nears target price, suggesting it's time to...

Comparing the impact of the Russia-Ukraine war on aviation companies to the current Israel-Hamas war reveals similar trends, suggesting trading...