Heading Into The Global Bull’s Quiet Summer…

Nicholas Vardy

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

Global markets will also need to digest their strong gains of recent weeks. Note that we are tightening our stops on many of our current holdings as we seek to lock in gains as well as gradually reallocate funds to the most immediate profit opportunities as they emerge over the next few weeks.

PORTFOLIO UPDATE

VIMPELCOM (VIP)

Vimpel Communications announced terrific first-quarter results, confirming that the global cell phone megatrend still has plenty of legs left. Quarterly revenues were $1.49 billion, up 59%. Earnings of $277.3 million were up 85% year over year, handily beating average profit forecasts of $245.5 million. Vimpelcom attributes its strong numbers to a combination of cost cutting and improved revenue-yielding policies.

A Deutsche Bank analyst put it best when he noted that "Vimpelcom has fulfilled ‘best case’ hopes for the Russian ARPU (average revenue per user) story by once again revealing stronger than expected pricing combined with continued usage strength."

The stock is up just under 10% since last month — for an annualized gain of over 154%. The options are up 75%. Hold on to both the stock and options for now, but tighten your stop to $88.50.

NII HOLDINGS (NIHD)

Although NII Holdings has taken a breather lately, the fundamentals are as strong as ever. Analysts recently raised the target price on the stock from $100 to $110. That’s a whopping 40% upside from the current price. With the stock up 6.65%, keep your stop at $73.75.

POSCO (PKX)

This Korean Steelmaker has been a terrific performer in the Global Bull Market Alert portfolio, and the stock is now up 16% over the past two months. That’s a 135% annualized gain. We’ve already taken large gains in the options, and our remaining options are in triple-digit percentage gain territory. Hold on to both the stock and the options for now and move your stop to $104.25.

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CVRD (RIO)

Our Brazilian commodity play is due for a bounce after selling off last week. Technically, the stock is in a solid uptrend, and merger speculation combined with higher commodity prices should drive the stock ahead. The stock is up 8.21% and our second set of options — the September $45 calls — should soon be back in the money, as well. The target price set by Goldman Sachs on this stock is $50. Tighten your stop to $38.50.

ALUMINUM CORPORATION OF CHINA (ACH)

This short-term, speculative trade has been a disappointment so far. Let’s keep a close eye on this one, as I am extremely cautious on the Chinese market. It is only a matter of time until the Chinese market falls out of bed. Let’s hold on to ACH for now, but also tighten our stop to $29.50.

Otherwise, Canadian fertilizer play Potash (POT), the National Bank of Greece (NBG) and the French iShares ETF (EWQ) remain buys at their current levels.

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Global markets continue to be in a remarkably bullish mood. Many commentators are questioning the conventional wisdom of "Sell in May and Go Away." The last time that advice did not work was back in 2003 when markets went up throughout the summer. I'd still cast my vote with those who suggest that the market will cool down over the summer from its recent strong run. Not to worry, though. Markets will come roaring back toward the end of the year -- traditionally the strongest time for global stoc

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