Relief Rally after the Tragedy in Japan

Nicholas Vardy

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

Markets rallied sharply last week. The Dow Jones industrial average closed above 12,000 for the first time since an earthquake hit Japan more than a week ago, and is now back near its highs on March 11 — the day the earthquake hit Japan.

The most obvious change in global markets as a result of Japan’s nuclear crisis and the violence in Libya has been soaring volatility. The Dow has moved up or down by at least 100 points in four of the five previous trading days.

The star of your Global Stock Investor portfolio this past week was undoubtedly Universal Display (PANL), which ended the week 32.02% higher on stronger-than-expected earnings. This is a volatile stock, but clearly rewarding if you can stomach the ride. You can expect similar volatility from Chinese solar play JinkoSolar (JKS).

Having been stopped out of a number of positions over the past two weeks, you have a lot of positions on your watch list. Positions to keep an eye on for possible re-entry include Freeport-McMoRan Copper & Gold, Inc. (FCX) and Agrium (AGU). I am still bullish on the long-term prospects for both of these holdings.

By now, you know my rule of thumb. Stocks that are trading above their 50-day moving average are a “BUY,” while those that have fallen below it, but have yet to hit their stop price, are “HOLDs.”

I’m going to break that rule in the case of the WisdomTree Japan SmallCap Dividend (DFJ) and recommend that you re-enter your position here. It was right to exit that position when you hit your stop after the earthquake. After all, it was a “Black Swan” event, where the ultimate impact of the tragedy was unclear for many days. But as I noted in yesterday’s The Global Guru, with the extent of the damage in Japan now clearer, it’s time to get back into the market.

Exclusive  Back into Japan -- And Putting Risk Back on

Meanwhile, in Asian markets, the Market Vectors Indonesia ETF (IDX) has quietly slipped back above the 50-day moving average, so I am recommending that you re-enter this position.

Portfolio Update

The WisdomTree Dreyfus Chinese Yuan Fund (CYB) rose .28% this past week. Dropping below its 50-day moving average, CYB is a HOLD.

WisdomTree Japan SmallCap Dividend (DFJ) already is rebounding from the sell-off it incurred after the triple disasters of a 9.0 magnitude earthquake, a life-destroying tsunami and the radiation fallout of a nuclear plant meltdown. Your stop price helped to protect you from a potentially big drop in the value of your holdings in DFJ and now the time has come to re-enter this position. DFJ is back to a BUY. Set a stop price of $35.

Global X FTSE Nordic 30 ETF (GXF) ended the week 4.34% higher, as European markets showed remarkable resilience. This ETF benefits both from strong economic growth (Sweden) and the price of oil (Norway). Bouncing back above its 50-day moving average, this bet on the most dynamic part of Europe is a BUY.

Market Vectors Indonesia ETF (IDX) is now back on our buy list, as the market has bounced 5.05% over the past month, up from its sell-off early in the year. Remember, this was probably the single top-performing market in the emerging markets world since the stock markets bottomed in 2009, so its strong relative performance should not come as too much of a surprise. IDX is back to a BUY. Set your stop price at $25.

JinkoSolar Holding Co., Ltd. (JKS) dropped 7.07% this past week. JinkoSolar continues to have a bullish outlook for 2011. It is projecting revenue in the range of $1.4 billion to $1.5 billion, which would be double 2010’s revenue of $705.3 million. Analysts have been moving to raise estimates. Five estimates moved higher for 2011 in the last 30 days, pushing up the Zacks Consensus Estimate by 49% to $7.32 from $4.92 per share. That is earnings growth of 21%. Trading below its 50-day moving average, JKS is now a HOLD.

Exclusive  My #1 Bet on the "Cloud Computing" Revolution -- and a New Option Recommendation

Universal Display Corp. (PANL) rose a staggering 32.53% this past week, including an eye-popping 19.07% gain last Wednesday. Revenue more than doubled to $10.8 million. Its operating loss narrowed substantially. Universal Display also sees wider marketplace adoption of its PHOLED technology in its 2011 fiscal year. In addition, the company announced that it is offering 5 million shares of its common stock in a registered public offering. After such a huge run, I’d like to see the stock pull back some. But PANL remains a solid BUY. Raise your stop to $34.50.

Market Vectors Russia ETF (RSX) rose 4.09% this past week. Its performance is linked closely to the price of oil. Up 6.7% year to date, Russia is the best-performing emerging market of 2011. Trading above its 50-day moving average, RSX remains a BUY.

Ultrashort Lehman 20+ Year Treasury (TBT) ended the week flat. With Dallas Federal Reserve Bank President Richard Fisher saying that the U.S. debt situation is at a “tipping point,” the fundamental case for this bet against U.S Treasuries remains intact. But with TBT slipping below its 50-day moving average, TBT is now a HOLD.

Vale S.A. (VALE) ended the week 1.07% higher. This stock is seriously oversold, but, like all emerging markets, it technically is just not behaving right. With the stock trading below its 50-day moving average, Vale is a HOLD.

P.S. I am pleased to invite you to be my guest at The MoneyShow Las Vegas, May 9-12, 2011, at Caesars Palace, where you can meet face to face with more than 100 world-renowned investing experts. Be there as recommendations and advice are revealed about how to best position your portfolio to profit — in 2011 and beyond. As this new era of investing unfolds, smart investors know it’s imperative to stay informed and educated. The MoneyShow is your one-stop resource for the most comprehensive education, efficient research, and valuable advice. Don’t miss out… register free today! Be sure to use priority code 021714.

Exclusive  Our Portfolio Shines in Sideways-Trading Market

Like This Article?
Now Get Our FREE Special Report:
Alternative Investing: Investing in Timber

Stock Investor editor Paul Dykewicz reveals why investing in timber may be one of the best long-term portfolio strategies you'll find today.

Get Access to the Report, 100% FREE


img
previous article

For a week that started off with a 9.0 earthquake and a potential nuclear meltdown, it could have been worse... You booked two big gains last week in your Bull Market Alert portfolio -- 171.43% in Sina (SINA) options last Monday and 112.62% gains in Alliance Resource Partners L.P. (ARLP) options on Friday.

PREMIUM SERVICES FOR INVESTORS

Dr. Mark Skousen

Named one of the "Top 20 Living Economists," Dr. Skousen is a professional economist, investment expert, university professor, and author of more than 25 books.

Product Details

LEARN MORE HERE

Bryan Perry

A former Wall Street financial advisor with three decades' experience, Bryan Perry focuses his efforts on high-yield income investing and quick-hitting options plays.

Product Details

LEARN MORE HERE

Jim Woods

Jim Woods has over 20 years of experience in the markets from working as a stockbroker,
financial journalist, and money manager. As well as a book author and regular contributor to
numerous investment websites, Jim is the editor of:

Product Details

LEARN MORE HERE

Bob Carlson

Bob Carlson provides independent, objective research covering all the financial issues of retirement and retirement planning. In addition, Bob serves as Chairman of the Board of Trustees of the Fairfax County (VA) Employees’ Retirement System, which has over $2.8 billion in assets.

Product Details

LEARN MORE HERE

Mike Turner

Mike Turner’s financial, mathematical, computer science and engineering background serves as the foundation for his disciplined, rules-based approach to trading. Mike’s three services include:

Product Details

LEARN MORE HERE

Hilary Kramer

Hilary Kramer is an investment analyst and portfolio manager with 30 years of experience on Wall Street. Since 2010, Hilary's financial publications have provided stock analysis and investment advice to her subscribers:

Product Details

LEARN MORE HERE

DividendInvestor.com

Used by financial advisors and individual investors all over the world, DividendInvestor.com is the premier provider and one-stop shop for dividend information and research.

Product Details

Popular tools include our proprietary Dividend Calendar, Dividend Calculator, Dividend Score Card, and many more.

LEARN MORE HERE