On Tuesday, you booked triple-digit percentage gains in Mongolia-based Ivanhoe Mines Ltd. (IVN). Your timing could not have been better as the stock pulled back the next day on news that Rio Tinto is in the process of lifting its ownership stake in the Canadian miner to 42.3%.
On Friday, you booked gains of about 325% on your options as Sina Corp. (SINA) — “China’s Twitter” — soared. I recommended that you hold onto the stock though, as we’ll be looking to add new option positions in the coming weeks.
Bank of Ireland (IRE) also shot up 53% last week, even as Fitch downgraded Ireland’s sovereign debt rating. There’s no doubt that Ireland will test your patience. But with Ireland attracting more U.S. direct investment than the BRIC countries — Brazil, Russia, India and China combined — Ireland isn’t going anywhere. Watch for plenty of other advisors to get on the Irish recovery bandwagon.
You were stopped out of India’s ICICI Bank Ltd. (IBN) on Thursday at a 3-cent loss on the stock. That’s just as well, as this stock has been acting very sloppily. But recall that you did sell one half of your options on Nov. 1 for a gain of more than 100%. Always remember to sell any of the related options that you have left when we stop out of a stock.
Here’s a quick note on our current Global Bull Market Alert strategy. As we are on the tail end of the Santa Claus rally, I want to make sure that you lock in the bulk of your gains. Over the last 65 years, when the S&P 500 has rallied at year’s end, the average gain has been 3.4% between Thanksgiving and New Year’s. So far, the index has risen 3.5% since the start of the period. So it may be time to start pulling in your horns a bit. As a result, I am tightening your stops on a number of your longer-held positions this week, including Credicorp Ltd. (BAP) and Sina Corporation (SINA).
I also want to extend a special welcome to our many new subscribers. Be sure to watch the short introductory video about how best to implement the recommendations in Global Bull Market Alert by clicking here.
Portfolio Update
Credicorp Ltd. (BAP) traded up right near record highs this past week, ending the week slightly lower. Peru’s biggest bank remains a BUY. Raise your stop to $118.50.
China MediaExpress Holdings (CCME) rose 4.86% this past week. With the company’s CFO reportedly buying the stock at $15 and China MediaExpress making 80 cents for every dollar it spends, the fundamentals on CCME remain compelling. Although the sharp zig zags in the stock can make you dizzy, CCME is back to a BUY.
iShares MSCI Chile Investable Mkt Idx (ECH) fell slightly this past week. Chile’s economy may expand at its fastest pace since at least 2004 next year as the country recovers from a February earthquake and its worst recession in more than a decade, President Sebastian Pinera said last week. ECH remains a BUY. Raise your stop to $74.75.
ProShares UltraShort Euro (EUO) rose 2.72% this past week, as the U.S. dollar continued to strengthen. I am keeping your bet against the euro as a speculative BUY. Raise your stop to $20.20.
Bank of Ireland (IRE) soared yet another 53% this past week, as the Irish drama continues to unfold. The basic bet is this: will Ireland default or not? I’m betting that it won’t. We notched spectacular gains this past week — but the drama isn’t over yet. IRE remains a speculative BUY.
Ivanhoe Mines (IVN) dropped like a rock on news of Rio Tinto’s increase in its ownership stake. Luckily, this was the day after you booked triple-digit percentage gains on your options. Well, my sources tell me that any majority ownership deal with Rio Tinto will be positive to shareholders. Some analysts actually have raised the target price on the stock. This long-term bet on the “Mongolian miracle” remains a BUY.
Melco Crown Entertainment Limited (MPEL) ended the week lower, with negative sentiment surrounding rival Las Vegas Sands still weighing on the stock. Until this clears up, I am moving your bet on Asia’s Las Vegas to a HOLD.
Sina Corporation (SINA) ended the week 6.98% higher. You took profits of 325% in the options trade that I recommended on Friday, closing out your option positions. I expect to add some more options as the stock corrects. “China’s Twitter” remains a BUY. Tighten your stop to $60.00.
Spreadtrum Communications, Inc. (SPRD) fell back in its first week in the portfolio, even as announcements for Taiwanese rivals suggest that it is gaining market share at their expense. With technology one of the hottest sectors on the globe, SPRD remains a BUY.
Silvercorp Metals Inc. (SVM) pulled back last week, as the company announced a slightly dilutive $100-million deal to finance its expansion. But SVM always has been about low cost and aggressive growth. SVM has a negative cost of production for silver, and silver is a bull market. Strap in and ride out the volatility. SVM remains a BUY.
Uranium Energy Corporation (UEC) had a bad week, with the stock pulling back sharply — demonstrating again the wisdom of booking your 111% option gains after only three days on Dec. 2. With the bullish case for uranium intact, and the stock strongly oversold and due for a bounce, the bullish case for uranium stocks remains in place. But because of the technical action in the stock, I am moving UEC to a temporary HOLD.
P.S. Don’t miss out on The World MoneyShow Orlando, February 9-12, 2011, at The Gaylord Palms Resort. This event will be your one-stop resource for the education, research and advice that you need to make smart investment decisions in 2011 and beyond. Join me there and hear leading experts reveal where they see growth opportunities in stocks, bonds, ETFs, commodities and options. Click on this link to The World MoneyShow Orlando to register or call 800/970-4355. Be sure to provide priority code 020758!
