Markets recovered strongly last week, with the Dow Jones up 1.42%, the S&P 500 up 1.75% and the NASDAQ soaring 3.25%. The MCSI Emerging Markets Index also ended the week up 2.68%.
Big gainers in your Bull Market Alert portfolio included MasterCard (MA), which rose 4.36%; the ProShares Ultra Nasdaq Biotechnology ETF (BIB), which jumped 4.18%; JA Solar Holdings Co. Ltd. (JASO), which gained 3.15%; and WisdomTree Japan Hedged Equity ETF (DXJ), which leapt 3.12%.
MasterCard (MA) rose back above its 50-day moving average and moved to a BUY.
Integrated Device Technology (IDTI) fell below its 50-day moving average and moved to a HOLD.
Raise your stop in JA Solar Holdings Co. Ltd. (JASO) to $9.90 to lock in at least 10% gain in this position. Raise your stop in the WisdomTree Japan Hedged Equity ETF (DXJ) to $57.95 to lock in at least a 15% gain.
Market sentiment has now shifted firmly into greed mode, with U.S. markets breaking out to record highs. I’m not convinced about the sustainability of this breakout, especially as S&P 500 earnings are weak, and we are entering a weak seasonal time of the year.
In addition, the bailout talks for Greece are coming to a climax. Based on meetings in Riga, Latvia, over the weekend, Greece’s reforms do not address important issues such as pension cuts and labor market reforms. The Greek finance minister also got a well deserved dressing down from fellow European Union (EU) finance ministers, specifically his Slovak and Latvian counterparts, for an unwillingness to impose cuts. Both Slovakia and Latvian, smaller and poorer EU countries, did so at the height of the financial crisis. A Greek default won’t mean the end of the world. But it will hit market sentiment hard over the short term.
So with your Bull Market Alert portfolio chock full of positions, I am going to hold off on making any new recommendations this week.
Portfolio Update
WisdomTree Japan Hedged Equity ETF (DXJ) started last week off on a strong note to gain 3.12% and hit a new 52-week high at the $58 price level. DXJ last visited $58 back in December 2014, where this price stood as a significant resistance level. With the Bank of Japan continuing its stimulus efforts, a breakout above $58 clears the way for additional future gains. DXJ is a BUY.
Halyard Health Inc. (HYH) added 1.57%. HYH will report earnings on May 4, before markets open. Analysts’ estimates are calling for $0.63 earnings per share on revenue of $401.5 million. HYH is a BUY.
MasterCard (MA) rose 4.36% over the past five trading days. MasterCard’s volume spiked to nearly double its normal volume last Wednesday as shares jumped 6% intraday on positive news out of China. China’s State Council released new rules allowing foreign companies to create credit card clearing entities. MA will report earnings on Wednesday morning before markets open. MA also moved above its 50-day moving average (MA) to become a BUY.
ProShares Ultra Nasdaq Biotechnology ETF (BIB) jumped 4.18% last week. After taking profits on BIB over a month ago, and side-stepping a significant pullback looming on the back of a price spike, you re-entered this position on March 30. Now up nearly 7% in just a few short weeks, BIB is easing back up towards last month’s highs at a pace that should allow for more gains. BIB is a BUY.
iShares MSCI Hong Kong (EWH) rose 2.53%. When the Hong Kong stock exchange released news of a new trading link to the Shanghai stock exchange last month, the Hong Kong exchange reported four million new brokerage accounts opening in March 2015 alone. This has led to a boom in investment in Hong Kong stocks and a boom in EWH. EWH remains a BUY.
Integrated Device Technology (IDTI) tumbled 8.18% last week, most of it on the last two trading days on heavier volume. This was part of a general sell-off in a few other sector-related companies and not on any news specific to the company. IDTI will report earnings on May 4, after markets close. IDTI has moved to a HOLD.
WisdomTree Europe Hedged Equity Fund (HEDJ) added 1.06%. This newest addition to your portfolio is currently on a dip from 52-week highs, providing an excellent point to jump back into the stimulus-fueled train powered by the European Central Bank. And, the ride is yet in its early stages. HEDJ is a BUY.
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