Celebrating Big Profits in Japan — And a Pair of Irish Options

Nicholas Vardy

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

It was yet another strong week for U.S. markets, with the Dow Jones up 1.56% and the S&P 500 rising 2.07%. The MSCI Emerging Markets Index, however, fell slightly, ending the week down 0.34%.

You had some big gains in Delphi Automotive (DLPH), which jumped 6.87%, and Stratasys Ltd. (SSYS), which rose 5.54%.

The big story of the week in your Bull Market Alert portfolio was Sony Corporation (SNE) as the stock soared after hedge fund manager Dan Loeb called for a restructuring of the company.

On Tuesday, you booked gains of 312% gains in half of your options. On Wednesday, you booked 229.90% gains on your remaining SNE options. I also recommended that you sell half of your Sony shares to book a solid 22.41% gain. Later that same day, you were stopped out of your remaining Sony shares for a gain of 20.28%, after the stock hit its updated, tight stop price of $20.40.

The good news from Japan continued throughout the week. Your leveraged bet on Japan — the Ultra MSCI Japan Proshares (EZJ) — soared another 5.84% this past week. This position is now up 31.61% since my initial recommendation. Tighten your stop to $84.50 to lock in your gains. Your related set of options on the Japanese market, the $45 and $50 August calls options on the WisdomTree Japan Hedged Equity (DXJ) ETF, are now up 255.71% and 44.4%, respectively.

Back on the other side of the planet, you also have two Irish bets in your Bull Market Alert portfolio, Bank of Ireland (IRE) and Jazz Pharmaceuticals (JAZZ).

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IRE has had a Japan-like run this year, soaring 46.92% year to date. With the stock pulling back after a run above $10, now is a good time to open an option position on this long-time Bull Market Alert recommendation. So buy the Bank of Ireland (IRE) October $10.00 calls (IRE131019C00010000) for potentially even bigger gains on the Irish rebound.

With brokerage firm Cantor Fitzgerald targeting $86 on the stock, Jazz Pharmaceuticals (JAZZ) also offers more big upside. With the stock settling down this past week, I recommend you buy the September $65 calls (JAZZ130921C00065000).

Portfolio Update

Bank of Ireland (IRE) dipped 1.44% last week. The $9.50 price level continues to be the line to watch this week as IRE resumes its upward trend. Bank of Ireland’s stock fell 98% over the past five years. However, IRE is now up 92% in just the past year alone. Trading above its 50-day moving average (MA), IRE is now a BUY.

ProShares Ultra MSCI Japan (EZJ) hit another new 52-week high last week, rising 5.84%. A glance at EJZ’s chart reveals the amazing resilience of this fund’s sustained 51% gain for 2013. The lure of the weakening yen continues to be too sweet for investors to pass up as they pour money into Japanese stocks. EZJ remains a BUY. Tighten your stop to $84.50.

Melco Crown Entertainment Limited (MPEL) fell 3.26% last week. Despite a solid earnings report in which MPEL beat analysts’ revenue estimates, MPEL has been slowly drifting lower due to downgrades from some ratings firms. MPEL is currently $1.00 from its 50-day (MA) — a level it has maintained above since moving past this line in August of 2012. A touch on its 50-day MA will likely signal the end of the recent correction and represent a buying opportunity. MPEL is a BUY.

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Delphi Automotive (DLPH) jumped 6.87% over the past five trading days. You opened this position with a particularly well-timed buy at the 50-day MA one month ago and now are up nearly 15%. Currently, eight analysts have a “Buy” on this position, with just two analysts rating it a “Hold” and no analysts rating it a “Sell.” DLPH is a BUY.

Stratasys Ltd. (SSYS) gained 5.54% on the heels of a winning earnings report last week, hitting an all-time high of $90.90. With momentum building once again in the 3D-printing sector, and SSYS’ peers reporting similarly positive numbers, any break above this level will likely signal the start of a sustained gain for your portfolio. SSYS is a BUY.

Jazz Pharmaceuticals (JAZZ) added 0.69% during its first week in your portfolio. JAZZ is held in the portfolios of the most noted hedge fund managers, including John Paulson. From a technical standpoint, JAZZ also bounced off of its 200-day MA twice in the past month, only to make a resounding recovery each time. This should provide excellent support for JAZZ’s move higher. JAZZ is a BUY.

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