Locking in Quick 60.71% and 109.52% Gains in China and India

Nicholas Vardy

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

Chinese portal SINA Corporation (SINA) rallied to yearly highs last week on earnings news from rival Baidu. With your January $50 call options up 60.71%, sell half of your options to lock in some quick profits made during the last three weeks. Hold on to the rest of your position in “China’s Twitter” for even more gains.

Also, Indian banking giant ICICI Bank Ltd. (IBN) announced better-than-expected earnings and jumped 5% on Friday. With your January $50 call options up 109.52%, sell half of your options to lock in your gains.

Our strategy looking ahead for the rest of the year remains the same. I expect global markets to continue rallying in November and December. This is thanks to a combination of strong seasonality in the markets, a robust global recovery and a policy of quantitative easing by the Fed. The Fed may be blowing bubbles, but that’s no reason not to profit from them.

Although many global stock markets technically are overbought, this is the time of year when you can expect that any pullbacks will be followed quickly by strong bounces. Among your current picks, I would highlight Brazil’s Itaú Unibanco Holding S.A. (ITUB) as particularly ripe for a strong bounce. The same goes for Bank of Ireland (IRE) — though as I have said, this pick, more than others, is highly, highly speculative.

Portfolio Update

Credicorp Ltd. (BAP) rose 1.25% this past week, and now is trading back near record highs. Peru’s economy should post strong growth in September, similar to the pace of August, when output rose 9.22% from the same month a year ago. Peru’s BAP remains a BUY.

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iShares MSCI Chile Investable Mkt Idx (ECH) closed at a record high of $75.84 on Friday. Chile’s jobless rate dropped to 8% from 8.3% during the three months ending in September. ECH remains a BUY.

ProShares UltraShort Euro (EUO) was flat this week, closing at the same place where it started. With negative sentiment against the U.S. dollar still near record highs, I am looking for a bounce against the euro. EUO is a BUY.

Global X/InterBolsa FTSE Colombia 20 ETF (GXG) fell back slightly this past week, even as Colombia’s central bank announced plans to stem a rally in the peso. GXG remains a BUY.

ICICI Bank Ltd. (IBN) ended the week 2.73% higher. India’s No. 2 lender reported an 18.8% rise in quarterly net profit, beating brokerage forecasts. The bank’s bottom line was helped by credit growth and a drop in the provision for bad loans. IBN remains a BUY. With your January $50 call options up 109.52%, sell half of your options to lock in your gains.

Market Vectors Indonesia ETF (IDX) rose 1.2% last week, and is back very near record highs. The “Next BRIC” remains a BUY.

Bank of Ireland (IRE) fell sharply this past week as a group of investors holding the junior debt of rival bank Anglo Irish Bank have vowed to oppose the offer made by the Irish government to pay them a fraction of the face value of the bonds. The pullback is purely a function of sentiment and has no bearing on this pick itself. If you have an appetite for volatility, Ireland’s top banking turnaround play is a BUY.

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Itaú Unibanco Holding S.A. (ITUB) fell back below the $25.00 level for the first time in several weeks, after climbing to a record high two weeks ago. Voters elected Dilma Rousseff as Brazil’s first female president yesterday. Nevertheless, Brazil’s markets will be quiet today, as they will be closed tomorrow for a national holiday. The current pullback in ITUB is a good time to add to your position. ITUB is a BUY.

SINA Corporation (SINA) jumped 4.43% and closed at a yearly high of $56.30, after rallying strongly on positive results from rival Chinese portals. The Economist reported that Weibu, Sina’s Twitter-like service, now has more than 20 million registered users. SINA will announce its unaudited financial results for the third quarter of 2010 on November 16, 2010. With your January $50 call options up 60.71%, sell half of your options to lock in some quick profits. China’s Twitter remains a BUY.

iShares MSCI Thailand Investable Market Index Fund (THD) flirted with record highs before ending the week slightly lower. The thai baht has surged 11% against the dollar this year to become the top-performing Asian currency behind the yen. THD remains a BUY.

Ivanhoe mines(IVN) ended its first week in the portfolio flat. Your bet on copper and the “mania for Mongolia” remains a BUY.

P.S. If you want to keep up with my latest insights on developments in fast-paced global markets, you can now follow me on Twitter on @NickVardy or on my new blog, NickVardy.com.

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