In today’s briefing:
- JAFCO Tender Offer Results – Low Pro-Ration Surprise, Murakami Overhang
- Nifty Index (NIFTY INDEX) Has Confirmed Multi-Month Downtrend Risk
- S&P (SPGI US) VS S&P (SPX Index): A Leveraged Play on Rate Expectations
- EQD | KOSPI2 Index: Buy Calls/Call Spreads into CPI Release – Update
- Comment on Exchange Rate EUR/USD – December 30, 2022
- Hang Seng CEI (HSCEI) – High Probability Target at 9450/70 in 2023 (+20%)
JAFCO Tender Offer Results – Low Pro-Ration Surprise, Murakami Overhang
- Jafco Co Ltd (8595 JP) announced the results of its Tender Offer Buyback today. They wanted to buy 16.8mm shares including 13.9mm from Murakami-san. He sold 9.63mm. Oops.
- Pro-Ration was 69.25% which means that Murakami entities are still long about 4.276mm shares or 5.83% of shares out.
- There should be some index selling, and some Murakami Overhang. There may be more overhang at recent prices.
Nifty Index (NIFTY INDEX) Has Confirmed Multi-Month Downtrend Risk
- At TMA we deliver high probability outcomes by focusing on our 3 pillars of technical analysis. 1) Response to key levels. 2) Price action. 3) Momentum confirmation.
- Every recommendation requires definitive evidence of all 3 pillars to be regarded as a high probability outcome.
- The Nifty Index (NIFTY INDEX) delivered upon our 3 pillars in Nov/Dec 2022. A consecutive down month in January will be further evidence of a likely 15%-18% correction.
S&P (SPGI US) VS S&P (SPX Index): A Leveraged Play on Rate Expectations
- S&P (the company) may be a lot more exposed than S&P (the index) if rates stay higher for longer and bets against the Fed unwind in 2H23.
- While we like the rating agency and financial data provider’s business portfolio, valuation is looking a bit stretched based on fundamental, relative and technical valuation metrics.
- We believe it is unlikely that the stock will push through the USD375/share resistance level in the near term, and would look for entry opportunities closer to USD325/share.
EQD | KOSPI2 Index: Buy Calls/Call Spreads into CPI Release – Update
- On Jan 19th we recommended a call and call spread to play upside in the KOSPI2 Index
- Since then the market has rallied 3.75% and has moved through our first strikes
- We look at restructuring the trades to play further momentum
Comment on Exchange Rate EUR/USD – December 30, 2022
- The EUR/USD exchange rate has been moving upwards, as seen in Graph 1. There were four secondary movements throughout the considered time period.
- More specifically, the currency pair showed an upward movement from November 30th up to December 2nd.
- From 3rd to 12th of December, the exchange rate fluctuated up and down, ending with a higher price range on December 14th.
Hang Seng CEI (HSCEI) – High Probability Target at 9450/70 in 2023 (+20%)
- On 26 January 2023 we published our bearish multi-month Nifty Index (NIFTY INDEX) outlook. For the RV player, the Hang Seng CEI (HSCEI) is likely to present material opportunity.
- At TMA we place tremendous emphasis on momentum confirmation. Currently, LT momentum triggers confirm a sustainable multi-month to multi-quarter uptrend in the HSCEI.
- Occasionally Fibonacci retracement levels, based off different portions of a trend, coincide. These create high probability targets. 9450/70 in the HSCEI is one such high probability target in 2023.
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