Booking 62.63% Profits and Locking in 10% and 25% Gains

Nicholas Vardy

Nicholas Vardy has a unique background that has proven his knack for making money in different markets around the world.

Last week was a negative one overall for U.S. stock markets, with the Dow Jones down 0.90%, the S&P 500 falling 0.69% and the NASDAQ slipping 0.03%. Global stock markets continued their retreat, with the MCSI Emerging Markets Index tumbling 2.46%.

Your Bull Market Alert portfolio did record two big gainers, with Ambarella Inc. (AMBA) rocketing 14.54% and Regeneron (REGN) soaring 5.24%. Both of these positions also hit new 52-week highs, as did last week’s recommendation, Silicon Motion Technology (SIMO).

With your Regeneron August $480 call options (REGN150821C00480000) up 62.63%, sell half of your options to lock in these solid double-digit percentage gains. Also raise your stop in Regeneron to $532.70 to lock in at least a 10% gain in the stock.

And with the Ambarella (AMBA) stock now up a whopping 29.36% in just the last three weeks, raise your stop to $99.90 to lock in at least a 25% gain in the stock.

We are now firmly in the weakest time of the year. In fact, June has been the worst month of the year for stocks across the past decade — down 1.32% on average. It is also the only month to see gains just four times in the past 10 years.

And there are other factors weighing on the overall stock market. The U.S. stock market remains among the most expensive in the world.

And in this world, even good news from the U.S. economy is bad news for the market. On Friday, the government announced that nonfarm payroll gains reached 280,000, which was 27% higher than expected. At the same time, any sign of economic strength in the United States is viewed as likely to move up the start of rate hikes, which could hit the market hard.

From a short-term trading standpoint, the biggest challenge in 2015 has been the lack of follow-up gains by any stocks. The recent pattern has been for strong stocks to break out and then dawdle. Of course, Ambarella and Regeneron have been an exception to this pattern. But such opportunities are hard to find in an overall market that has barely budged this year.

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So this week, I am recommending that you keep your investment powder dry, and I’ll be back with a new Bull Market Alert recommendation next week.

Portfolio Update

Halyard Health Inc. (HYH) added 1.62% last week. This play on medical device technology has stabilized recently after experiencing a significant post-earnings-report pullback. Now closing its second week of sideways consolidation trading, HYH is in position to make a recovering bull run higher. HYH is a HOLD.

iShares MSCI Hong Kong (EWH) rose 0.42%. There are endless ways and methods to value global markets. However, some of the most common include known measures such as price-to-earnings ratio, CAPE ratio and price-to-book ratio — just to name a few. One such effort was made by The Telegraph newspaper in the United Kingdom, which recently listed 35 global markets in order from cheapest to most expensive. Hong Kong placed as the 11th cheapest market in the world. Not bad. Interestingly, the number one listed expensive market was none other than the good old U.S. of A. EWH is a BUY.

WisdomTree Europe Hedged Equity Fund (HEDJ) gave back 1.87%. According to The Telegraph study described above, it’s not surprising that several European countries fall closer to the “cheap” side of the listing, making Europe overall quite a bargain. HEDJ is a BUY.

Regeneron (REGN) leapt to a new 52-week high last Friday to close the week up 5.24%. REGN had been trading sideways for the past two weeks. This all changed last Friday, though, as REGN moved up nearly 4% on that day alone. The Food and Drug Administration (FDA) is considering the application of REGN’s drug alirocumab to reduce cholesterol. That drug potentially could generate billions in sales. It also would be a big step in the fight against heart attacks and stroke as it signifies the first major new drug since statin pills to enter the market as far back as the late 1980s. Raise your stop in Regeneron to $532.70 to lock in at least a 10% gain in the stock. REGN is a BUY.

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Ambarella Inc. (AMBA) rocketed 14.54% in your portfolio last week to hit another new 52-week high. I’ve highlighted the driving forces behind AMBA’s stellar run several times over the past weeks. Since reporting stellar earnings last Tuesday, both trading volume and stock price shot up as AMBA reported a better-than-expected $0.56 earnings per share (EPS) vs. a $0.17 EPS figure in the same quarter one year ago. Revenue also jumped a whopping 73.5% higher year over year to $71 million from $40.9 million last year. Raise your stop to $99.90 to lock in at least a 25% gain in the stock. AMBA is a BUY.

Silicon Motion Technology (SIMO) gave back 2.43% for its first week in your portfolio after hitting a new 52-week high last Thursday. SIMO announced Wednesday that one of its high-end PC controller components now supports the latest and fastest flash memory chips from Micron, allowing users to purchase some of the highest-performing and most reliable solid-state hard disks for their computers at reasonable pricing. SIMO is a BUY.

Latest Special Report

As a courtesy, I invite you to view my newly created special report, The Biotech Millionaire Map. This report and others are available FREE on my website to you.

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Nicholas Vardy

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