Vermilion Int'l Compass: Global Equity Strategy
Buying Global Financials & Autos/Auto PartsMarket dynamics remain healthy which suggests a new broad-based bull market is not far off. With that said, we are still waiting for confirmation in the form of breakouts or bullish price inflections on the broad global indexes (ACWI-US, ACWX-US, EFA-US, and EEM-US) in order to turn bullish.
Index Overview. Despite healthy market dynamics, we cannot turn bullish until we start to see breakouts on the broad global indexes (MSCI ACWI ACWI ex-US, and EAFE). Important resistance levels on the MSCI ACWI (ACWI-US), ACWI ex-US (ACWX-US), EAFE (EFA-US), and EM (EEM-US) include $105.40, $58.50, $82.25, and $53.60, respectively. Until we get breakouts above these resistance levels, we continue to expect more consolidation and mixed markets... see charts below.
Watching MSCI China, Hang Seng. MSCI China (MCHI-US) and Hong Kong's Hang Seng have been two of the problem areas negatively affecting global risk sentiment. With that said, both are attempting to bottom. Important resistance levels we are watching include $74 on MCHI-US and 26,235 on the Hang Seng. Breakouts above these levels would signal the bottoms are in, and would be very bullish for global equities... see page 2.
Actionable Theme: Major Autos/Auto Parts. Global automobile stocks display bullish price and RS inflections with many breaking out to new highs -- add exposure... see pages 3 and 5-6.
Actionable Theme: Financials. There continues to be a plethora of attractive Financial stocks globally, ranging from banks and insurance to financial services -- add exposure
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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