U.S. markets regained their footing last week after the Dow Jones rose 0.92% and the S&P 500 jumped 0.54%. Despite the sharp sell-off in Russia, the MCSI Emerging Markets Index ended the week 0.62% higher.
Big gainers in your Bull Market Alert portfolio included Vipshop Holdings Limited (VIPS), which jumped 3.80%, Alcoa Inc. (AA), which gained another 3.26%, and the ProShares Ultra Real Estate ETF (URE), which rose 2.34%
Three positions — the ProShares Ultra Real Estate ETF (URE), iShares MSCI BRIC ETF (BKF) and Alcoa Inc. (AA) — hit new 52-week highs.
Despite last week’s positive move, the U.S. market hasn’t budged much since the start of the month.
So this week I’ll be holding off on making a new Bull Market Alert recommendation.
The big news this past week was the downing of passenger jet Malaysian Airlines flight 17 in Eastern Ukraine by Russian-backed rebels.
This, of course, impacts directly on your current position in Mobile Telesystems (MBT), the Moscow-based telecom provider.
The Russian stock market was hit hard on the news as investors dumped Russian stocks in droves, confirming Russia as the most hated stock market in the world.
As appalling as that event is, as I pointed out on Friday on Fox Business News’ “After the Bell,” bad news from Russia usually signals a market bottom.
From a purely short-term trading perspective, the situation is similar to the Russian occupation of Crimea.
Recall that the day after the referendum in March signaling the annexation of Crimea, the Russian market hit bottom, and it has been in an uptrend since. It’s also the same day I recommended that you buy Gazprom (OGZPY), in which you ended up booking a quick and tidy profit as it bounced strongly over the next few weeks.
Sure enough, both the Russian stock market — and MBT — recovered sharply on Friday.
So hold on to your position in MBT for now. And if you have nerves of steel, you may want to even add to your position here.
Portfolio Update
Visa Inc. (V) gained 1.47%. Visa made a significant announcement last week, introducing the world to Visa Checkout. This payment service will be Visa’s answer to PayPal, and it will allow online payments across a range of devices. V will report earnings on July 24, after markets close. Visa is a BUY.
ProShares Ultra Real Estate ETF (URE) rose 2.34%. Real estate continued higher last week as URE hit another 52-week high. This “ultra” exchange-traded fund has been delivering “2x” returns on the real estate recovery since bottoming in late 2013. Real estate continues its stealth rebound. URE is a BUY.
Flextronics International (FLEX) closed perfectly flat last week. Flextronics has a very aggressive long-term stock buyback program in place, providing an exceptional tailwind for this stock. And, trading at just nine times earnings, this stock remains “cheap” from a valuation perspective. FLEX is scheduled to report earnings on July 24, after markets close. FLEX is a BUY.
Alcoa Inc. (AA) gained another 3.26% last week as it continued to enjoy the afterglow of its recent earnings report. AA also hit a new 52-week high. You closed the remainder of your options on this position last Thursday for a gain of 122.78%. Be sure to raise your stop to $16.25 to ensure a 10% gain on your stock holdings. AA is a BUY.
Vipshop Holdings Limited (VIPS) jumped 3.80% during its opening week in your portfolio. VIPS also closed the week just shy of its recent 52-week high. Analyst firm Jefferies currently has a “Buy” rating on VIPS, expects “strong organic growth” and has a price target of $240.00. This represents a potential 21% move above Friday’s closing price. VIPS is a BUY.
Latest Special Report
I encourage you to read the newly updated version of The Top 12 Stocks You Should Buy Right Now, which features three of my top investment recommendations for the second half of 2014, as well as bonus picks from each of my fellow investment newsletter editors at Eagle Financial Publications.
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