U.S. markets recovered somewhat last week, with the Dow Jones up 0.92%, the S&P 500 rising 1.60% and the NASDAQ jumping 2.66%. The MCSI Emerging Markets Index soared 3.22% — its best week in recent memory.
Big gainers in your Bull Market Alert portfolio included the ProShares Ultra Nasdaq Biotechnology ETF (BIB), which jumped 2.90%; the Rubicon Project, Inc. (RUBI), which added 2.53%; WisdomTree Japan Hedged Equity ETF (DXJ) rose 1.63%; and Palo Alto Networks, Inc. (PANW) gained 1.44%.
The ProShares Ultra Nasdaq Biotechnology ETF (BIB) also hit a new 52-week high.
The worst performer of the week was Bank of Ireland (IRE), which tumbled 9.7% last week. See an important update about this position in the Portfolio Update section below.
So far this year, the market has been friendly to neither bulls nor bears. The major indexes have been up and down stretching back to the start of December.
This week’s Bull Market Alert recommendation takes you to a market where the bull is raging by revisiting HDFC Bank (HDB), one of India’s largest banks. Here’s why I expect HDFC to perform well in the coming weeks.
First, last week saw a big jump in Indian stocks overall as the Royal Bank of India (RBI) initiated a surprise cut in interest rates in between regular market committee meetings. The Bank had hinted it would do so if inflation figures came in below expectations. This was just what the Indian market needed to break out of its trading range.
Second, after booming in 2014, when the Bombay Stock Exchange’s Sensex index rose nearly 30%, the Indian stock exchange’s strong performance has continued into 2015. In last week’s edition of The Global Guru, I discussed how the Modi government’s recent reforms had raised sentiment among both local and international investors considerably. And that process is still relatively new.
Finally, as one India’s leading banks, HDFC is one of the best ways to benefit from the Indian stock market’s rebound. The bank is growing by leaps and bounds, adding 349 branches and 338 ATMs during the October-ended quarter to its distribution network. That brings the total number of branches and ATMs to 3,600 branches and 11,515 ATMs. It is now present in 2,272 cities and towns, up from 2,022. The bank’s current fiscal year earnings are expected to grow even more, by 23% this year and then 24% in fiscal 2016.
My only concern is that the bank’s stock price has gone up so fast since the RBI’s interest rate announcement that you can expect a pullback of some sort in the coming days.
With that caveat, I am recommending that you buy HDFC Bank (HDB) at market today and place your stop at $48.00.
With the stock’s recent sharp gains, I am going to hold off on recommending the options until the stock settles.
PowerShares DB Commodity Tracking ETF (DBC) fell again last week, adding another 1.48% gain to your portfolio for this short position. DBC began its fall on the weakness in commodities back in June of 2014 from its 52-week high of $26.94. A quick look at the chart reveals that this exchange-traded fund has only been able to log a few very anemic winning weeks since that high. DBC remains a SHORT SELL.
ProShares Ultra Nasdaq Biotechnology ETF (BIB) rose 2.90%. Your leveraged bet on biotech opened last week by jumping to a new 52-week high and holding on all week. Although an individual biotechnology stock can literally make or break you due to wild volatility, BIB’s highly diversified nature allows you to collect on the biotech boom and be able to sleep at night. BIB is a BUY.
WisdomTree Japan Hedged Equity ETF (DXJ) added 1.63%. WisdomTree Investments is the largest provider of “currency-hedged” funds, such as DXJ, and their popularity remains strong. In fact, WisdomTree has taken in nearly $1 billion in 2015 so far, and a very large portion of this went straight into DXJ. DXJ is a HOLD.
Euronet Worldwide (EEFT) gained 0.81% last week. EEFT has been pulling back over previous weeks, dipping just shy of 6% since its recommendation. However, this position now rests just above the mighty 200-day moving average (MA) after taking a small bounce at this level late last week. EEFT has spent nearly all of the previous year above this level, bouncing higher each of the three previous times it has touched this line. In fact, the last 200-day MA touch put EEFT on a 36% bull run that lasted seven weeks. EEFT is a HOLD at the moment.
MasterCard (MA), the newest addition to your portfolio, stayed relatively flat over the holiday-shortened week to gain 0.70%. MA will report earnings on Friday before markets open. MasterCard also announced last Friday that it will remove blocks on U.S.-issued card transactions in Cuba as of March 1, 2015. In MasterCard’s game, more transactions means more earnings. MA is a BUY.
Bank of Ireland (IRE) tumbled 9.7% this past week. This wasn’t because of any fundamental news with the company. Instead, Bank of New York announced that it was winding up its ADR (American Depository Receipt) Program in Bank of Ireland in April, effective April 22. This means that Bank of Ireland will no longer trade directly on U.S. stock exchanges and be available through your standard brokerage account. You will have an option to retain your holding in Irish-listed Bank of Ireland by giving notice. Otherwise, you will receive proceeds from the sale of shares.
Note that this is second-hand information about IRE, and will need to be confirmed by your broker.
If it weren’t for this development, I would continue to be bullish on the stock, especially after the Quantitative Easing Program announced by the European Central Bank.
Latest Special Report
As a courtesy, I want to bring to your attention the newest version of The Top 12 Stocks for 2015, which features three of my top investment recommendations, as well as bonus picks from each of my fellow investment newsletter editors at Eagle. This report and others are available FREE on my website to you.
NEW FEATURE — Receive your alerts via text! You now can receive a text message on your cell phone to inform you whenever a trading alert is sent. To add this free new benefit to your service, please send an email to CustomerService@NicholasVardy.com with the following information and mention in the email that you want your cell phone added to your account:
- Your Name
- Your Zip Code
- Your Email Address
- Your Cell Phone number
Please note that we can only deliver text messages to cell phones with U.S. or Canadian numbers. Standard text messaging rates from your provider apply.
Join me for the World MoneyShow in Orlando, Florida, Feb. 4-7 at the Gaylord Palm Resort & Convention Center. To register for free admission to the investment conference, click here or call 1-800-970-4355 and mention you are my subscriber. Use priority code 038045.