Vermilion Compass: Weekly Equity Strategy
THEMES:After a brief scare in growth, and a (bullish) resolution in the financial sector, the market has returned to business as usual: up and to the right.
What is more important, however, is where the up-and-to-the-right relative strength is concentrated—which Sectors and Groups. In our opinion, studying these—Sectors and Groups—provides better insights and outlooks than simply observing the underlying index, like the S&P 500. And right now, we are seeing positive signs including:
• Tech continues to lead. Despite the quick sell-off, the Sector's long-term price and relative strength uptrends remain intact. And it barely dropped in our weekly rankings (currently at #2) ... see page 2
• Financials are inflecting higher. The XLF's potential top pattern was averted, and most financial stocks are beginning to rebound off support. Broker-dealers and electronic exchanges like MS and CBOE are leading the turnaround... see page 3
• Biotechs are breaking out. As we pointed out last week, the XBI (ETF) was setting up for a breakout. We saw confirmation yesterday. Today's report is dedicated to actionable biotechs... see pages 7-18
• Transports continue to act well. Airlines and most rails are breaking out to multi-year highs. Large-cap truckers reveal improvements too.
• Manufacturing is trading near all-time RS highs.
• Ex-retailers, Consumer Discretionary is improving. Take the long lagging retailers out of the equation, and the Sector reveals decent technicals. Leadership is still visible in casinos (LVS), hotels (H), and homebuilders (MDC).
• Charts highlighted: ALNY, AVXS, AXGN, BIIB, BLUE, BONE, CELG, CLVS, FGEN, FOLD, IAI, IONS, IRWD, KITE, KRE, LOXO, LXRX, MDXG, MYGN, NKTR, NVCR, PBYI, REGN, SAGE, TBPH, VRTX, XBI, XLF
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Alnylam Pharmaceuticals is a commercial-stage biopharmaceutical company developing therapeutics based on RNA interference (RNAi). RNAi is a biological pathway within cells for sequence-specific silencing and regulation of gene expression. The company has two RNAi-based medicines, ONPATTRO? (patisiran) and GIVLAARI? (givosiran). ONPATTRO is approved by the United States Food and Drug Administration (FDA) for the treatment of the polyneuropathy of hereditary transthyretin-mediated amyloidosis in adults and has also been approved in the European Union, Japan, Canada and Switzerland. GIVLAARI is approved by FDA for the treatment of adults with acute hepatic porphyria.
Vermilion Research delivers timely, actionable, and unique research inputs to professional investors. Our research strategists highlight securities which we believe are at major inflection points, based on our various proprietary technical indicators, and offer asymmetric risk/return profiles. We believe our research methodology, which is not limited by industry sector or market capitalization, enables us to deliver superior investment recommendations.
Our process begins by organizing all actively traded stocks into coherent sectors, then into logical industry groups. We then apply our proprietary relative strength tools to identify developing price trends. Once attractive trends are identified within a selected sectors or groups, we screen for individual stocks which we believe offer the best risk/reward profile. Vermilion offers U.S. and global equity market research products. Vermilion’s research team, which has received numerous awards and accolades, has a combined 70 year of experience in the analysis of investment securities.
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