Vermilion: EM Screen & Chart Book - Bullish Steel Stocks
​EM screen and chart book... Our Emerging Market Screen & Chart Book helps pinpoint leading stocks, weeding out lagging and stagnating trends. This is performed through a screen with a simple filter: only stocks trading within 5% of a 52-week relative strength high make the cut. From this list, we scan through each chart (daily, weekly and monthly timeframes) and highlight our favorites in the following pages.
Today’s report contains both: (1) actionable charts (pages 2-24), and (2) the screen (pages 25-30).
Screen Parameters:
Market Cap > $500mil ($USD)
Trading within 5% of a 52-week relative strength high (vs. MSCI Emerging Market Index)
Notable themes:
The big winners... As we highlighted in our April International Macro Vision’s strategy, major shifts in leadership are underway. The U.S. Dollar Index is approaching a breakdown (below the 93 level), endorsing the signs of recent rotation into emerging markets and commodity-related countries, currencies, and sectors. Within EM equities, the materials sector is the biggest winner. The MSCI EM Material Index’s relative strength trend, for example, is reversing a five-year downtrend (see chart below). Increase exposure.
Corresponding with the rotation into late-stage cyclical sectors, this week’s screen contains a drop-off in defensive stocks, especially consumer staples. The MSCI EM Consumer Staples Index’s relative strength trend has trailed lower since February. This is a positive sign for the broad EM universe, indicating a return of the risk-on trade.
Steel stocks showed up in large numbers within this week’s screen. No surprise here -- our global Steel Groups are beginning to reverse multi-year relative strength downtrends, providing an attractive bottom-fishing trade. EM-related names we like include: Severstal (CHMF-RU), Tata Steel Ltd (500470-IN), JSW Steel Ltd (500228-IN), Industrias CH SA de CV (ICHB-MX), and Dongakuk Steel Mill (001230-KR).
JSW Steel Limited is a holding company. The Company is engaged in the business of production and distribution of iron and steel products. Its segments include Steel; Power (used mainly for captive consumption), and Others, which includes cement, mining and construction activities. Its product portfolio in flat and long steel products includes hot rolled (HR) coils, sheets and plates; cold rolled coils and sheets; galvanized products; galvalume products; non-grain oriented electrical steel (CRNGO); pre-painted galvanized products (color coated sheets/coils); pre-painted galvalume products; wire rods; special steel bars/wires; rounds and blooms, and angles. Its color coated products include JSW Pragati, JSW Colouron and JSW Colouron+. Its galvanized products include JSW Vishwas and GALVOS. It has plants in over six locations in India, including Vijayanagar in Karnataka, Salem in Tamil Nadu, and Tarapur, Vasind, Kalmeshwar and Dolvi in Maharashtra.
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.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.