Results were mixed for U.S. stock markets last week with the Dow Jones up 0.13%, S&P 500 down 0.20% and the NASDAQ rising 0.55%. Emerging markets continued their relentless weakness, dragging the MCSI Emerging Markets Index down another 1.19%.
Big gainers in your portfolio included Bank of Ireland (IRE), which added 3.99%, and Apple Inc. (AAPL), which jumped 1.45%.
Last week’s Bull Market Alert recommendation, AbbVie (ABBV), already oversold when I recommended it — fell just below its 50-day moving average (MA) and technically moved to a HOLD. That said, I am slightly torn on this one, as its oversold condition in the context of a strong uptrend actually makes this a terrific point of entry using some of my other favorite technical indicators.
So where do we stand today?
Despite the S&P 500 hitting a new high last week, markets are struggling to generate any sustained upside in 2014. Many of the shorter sentiment indicators I look at are signaling choppier days ahead for the U.S. market. That said, certain stocks and markets continue to offer some solid opportunities, and those are the ones I’ll be focusing on in the days and weeks ahead.
So this week, I am holding off on making a new stock recommendation.
Instead, I am making the following new option recommendations on your existing positions:
- Buy the February $1,160 Google (GOOG) call options (GOOG140214C01160000) in anticipation of Google’s earnings announcement on Jan. 30. Recall that last quarter the stock soared as much as 15.98% after its earnings announcement, and you made big money on your call options at the time.
- With the Bank of Ireland’s (IRE) stock price settling down a bit after hitting record highs, it is a good time to reboot another option play by buying the April $20 call options (IRE140419C00020000). Recall that you’ve already booked big gains of 66.67% and 103.70% in your last set of Bank of Ireland (IRE) option recommendations just in the first trading week of this year.
In addition, sell your position in the db X-trackers Harvest China ETF (ASHR) and the related February $39 call option in iShares China Large-Cap (FXI) at a loss. This trade was predicated on the expectation of a sustained rally in emerging markets in December and January. Sadly, that rally has simply not come to pass. So, it is best to cut your losses here.
Finally, raise your stops in your positions in iShares MSCI Spain Capped Index (EWP) to $37.00 and Apollo Global Management, LLC (APO) to $30.00.
Portfolio Update
Bank of Ireland (IRE) added 3.99% last week and hit a new 52-week high on Monday. After that, IRE tapped the brakes slightly last week as it slowed its breakneck pace a bit to consolidate gains — a healthy development. Ratings agency Fitch upgraded IRE early last week from “B” to “B+” — citing positive improvements to IRE’s risk profile. Moody’s also upgraded Ireland’s government debt rating and changed its outlook to “Positive.” IRE is a BUY.
Google Inc. (GOOG) gained 1.80%, once again hitting a new 52-week high. No goal appears too lofty for Google as it announced last week that it is wading into the biotech arena. Google is attempting to create a contact lens that includes glucose-monitoring technology and a wireless micro-transmitter. The contact lens will transmit real-time blood sugar data to a receiver worn on a diabetic, providing the most comprehensive glucose-tracking effort available — and without the need for needles or finger-pricks. Although Google has many “moon shot” ideas on the burner, this one really is thinking out-of-the-box — especially for an online advertising company. GOOG will report earnings on Jan. 30, after markets close. GOOG is a BUY.
iShares MSCI Spain Capped Index (EWP) gained 0.28% last week and hit a new 52-week high. EWP has been steadily making gains for the past month, rising 11% since finding a bottom late last month. EWP may take a breather at the $40.00 price level before gains continue. EWP is a BUY. Raise your stop to $37.00.
Trina Solar Limited (TSL) lost 2.52%. TSL bumped up against a significant resistance level last week, halting its rise at $18.00. However, with the Chinese government committed to new solar power incentives, I expect to see a further rise in TSL’s price. TSL is a BUY.
Apple Inc. (AAPL) added 1.45% over the last five trading days, staying above the short-term $540 resistance level. The chief investment officer of investment firm Raymond James disclosed the company’s “Best Picks” list last Friday, and Apple was prominent on the list. He expects that Apple is poised to “outperform” over the coming months and years, as do I. Apple will report earnings on Jan. 27, after markets close. AAPL is just below the 50-day moving average (MA) and remains a HOLD.
Apollo Global Management, LLC (APO) dipped 1.85% last week after hitting a new 52-week high on the heels of excellent gains over the past few weeks. Apollo Global announced that it will acquire the holding company of the popular Chuck E. Cheese restaurant/children’s-gaming chain. APO will report earnings on Feb. 6, before markets open. APO is a BUY. Raise your stop to $30.00.
AbbVie (ABBV) dipped 1.65% for its first week in your portfolio. AbbVie announced Wednesday that Phase 3 testing would begin for its upcoming drug Veliparib. This drug will help patients with early-stage triple-negative breast cancer. ABBV will report earnings on Jan. 31, before markets open. ABBV is trading directly along the 50-day MA and recently dipped to a HOLD.
Latest Special Report
As a courtesy, I want to bring to your attention my latest special report, the newly updated version of The Top 12 Stocks You Should Buy Right Now, which features three of my top investment recommendations, as well as bonus picks from each of my fellow investment newsletter editors at Eagle.
Upcoming Appearances
- World Money Show, Jan. 29-Feb. 1, Gaylord Palm Resort, Orlando: Join Ann Coulter, Dr. Mark Skousen, Chris Versace, Dennis Gartman, other top investment experts and me. Go to NicholasVardy.WorldMoneyShow.com to sign up free as my guest or call the Money Show at 1-800/970-4355 and mention priority code 034199. Be sure to sign up for my private, subscribers-only meeting if you plan to attend The World MoneyShow Orlando. The room for my private meeting is St. George 108, and my gathering is scheduled for Friday, Jan. 31, beginning at 1 p.m. I encourage you to sign up for my private meeting today.
- I will be meeting with current and prospective Global Guru Capital clients at the World Money Show in Orlando on Friday, Jan. 31 and Saturday, Feb. 1. If you would like to set up a meeting with me personally, please drop my assistant a note at sarah@globalgurucapital.com to set up a time. NOTE: Global Guru Capital is a Securities and Exchange Commission-registered investment adviser, and is not affiliated with Eagle Publishing.
