The Bull Pulls its Horns — And Offers Four Special MoneyShow Picks

Nicholas Vardy

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

Your Bull Market Alert portfolio had a mixed week, as markets continue their latest downdraft. Asia sold off sharply overnight, as slowing growth in China, the contraction of Japan’s economy and Europe’s debt problems continued to weigh on global financial markets.

Only a few selected sectors, telecoms, timber and biotechs among them — as reflected in your holdings in Millicom International (MICC), Rayonier (RYN), Alexion Pharmaceuticals (ALXN) and Novo Nordisk A/S (NVO) — are holding up in the midst of this recent sell-off.
 
Last week, you stopped out of Joy Global (JOYG) when the stock fell below our $86 stop price. As usual, when you stop out of a stock, sell the related options.
 
Technically, almost all of your current Bull Market Alert positions are oversold and are due for a bounce. That said, I have moved almost all of your positions to HOLDs, as they have fallen below their 50-day moving averages.
 
For all of the recent nervousness in the market, it’s important to remember that the biggest bounces happen after the biggest corrections. And once the market changes its tone, your positions can recover quite sharply. When it’s been a “good news” week, Bank of Ireland (IRE) and National Bank of Greece SA (NBG) have shot up as much as 30% in the span of a few trading days. The same reasoning applies to your commodity-related positions Alliance Resource Partners L.P. (ARLP) and Nabors Industries (NBR),as well as ELEMENTS Rogers Intl Commodity Agri ETN (RJA).
 
The bottom line? Make sure you have your stops in place, in case the market continues its correction. But don’t forget, as unnerving as the market may feel, you’re still within a couple of good trading days of having almost all of your Bull Market Alert positions showing a profit.
In the meantime, instead of providing you with a specific short-term Bull Market Alert recommendation this week, I wanted to give you access to my recent Las Vegas MoneyShow presentation, “Five Global Megatrends that Will Make you a Fortune in 2011.” You can download it by clicking on the link HERE.
I think you will find this presentation especially valuable, as all but one recommendation will be new to you. They are current recommendations in my monthly investment newsletter, The Alpha Investor Letter. I should add that The Alpha Investor Letter focuses on longer-term recommendations than Bull Market Alert. In that way, it complements your Bull Market Alert trading service quite well.
Portfolio Update
Alexion Pharmaceuticals (ALXN) ended the week 3.87% lower. The stock issued new shares to complete its 2-for-1 split at the start of trading today. As a result, we will reduce our stop price from the previous level of $92 to $46. With the stock trading below its 50-day moving average, ALXN is back to a HOLD.
 
Alliance Resource Partners L.P. (ARLP) rose 3.71% this past week. Despite worries about the environmental impacts of coal mining, Alliance Resource’s product likely will see high demand for years to come. For now, though, trading below its 50-day moving average, ARLP is a HOLD.
 
Bank of Ireland (IRE) fell 2.73% this past week. The Bank of Ireland announced that its loan losses already have peaked as the country emerges from a deep banking and debt crisis. Trading below its 50-day moving average, IRE is a HOLD.
 
Millicom International (MICC) ended the week 1.4% lower. With the stock technically strong, and the global telecom sector coming back into vogue, Millicom remains a BUY.
 
Nabors Industries (NBR) ended the week flat. I’ve been looking for an opportune moment to exit this position for a while, but haven’t yet seen it. With the stock as oversold as it has been since last September, I want to sell this into any short-term bounce. Until then, NBR is a HOLD.
 
National Bank of Greece SA (NBG) dropped another 5% this last week. With rating agency Fitch
downgrading Greece, the news from Greece is not getting better. Nevertheless, I continue to believe that a bailout of the country is inevitable — which will boost the stock. NBG remains a HOLD.
 
Novo Nordisk A/S (NVO) ended the week flat. With the company’s operating margins exceeding historical averages, the fundamentals of the company are as strong as ever. Flirting with its 50-day moving average, NVO remains a HOLD.
 
Rayonier Inc. (RYN) rose slightly its first week in the portfolio. The company declared a second quarter cash dividend of 54 cents per common share. The dividend is payable on June 30, 2011, to shareholders of record on June 10, 2011. RYN is BUY.
 
ELEMENTS Rogers Intl Commodity Agri ETN (RJA) bounced a solid 4.85% this past week. But it still is trading below its 50-day moving average. This bet on agricultural food prices remains a HOLD.
 
Sohu.com (SOHU) ended the week flat. As by far the cheapest among China’s portals, Sohu is a standout value play among a sea of overvalued Internet stocks. Still trading below its 50-day moving average, Sohu is a HOLD.
 
Toyota Motor Corp. (TM) dropped 4.1% this past week. The company recently announced that eight of its North American-built models, including the Camry and Corolla, would return to 100% production in June. This is well ahead of Toyota’s previously announced timeline of November/December. Trading right at its 50-day moving average, Toyota is a BUY.
 

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Although it wasn't a terrific week for global financial markets, your Bull Market Alert portfolio held up well. Your two healthcare stocks, Alexion Pharmaceuticals (ALXN) and Novo Nordisk A/S (NVO), both ended the week higher. Global telecom play Millicom International (MICC) hit a 52-week high. And with production resuming at Toyota Motors (TM) at faster-than-expected rates, the Japanese automaker was

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