Booking Some Gains, and Three New Options Plays

Nicholas Vardy

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

It was a solid week for U.S. stock markets with the Dow Jones up 0.67%, S&P 500 rising 1.21% and the NASDAQ jumping 1.36%. The MCSI Emerging Markets Index corrected 1.37%.

The biggest gainers in your Bull Market Alert portfolio included the ProShares Ultra Real Estate ETF (URE) and EOG Resources, Inc. (EOG) — both of which gained 1.76% last week. Visa Inc. (V) continued to bounce, rising 1.30%. EOG Resources, Inc. (EOG) also hit a new 52-week high.

India’s Tata Motors Limited (TTM) fell below its 50-day moving average and moved to a HOLD.

This week, I am making recommendations on your existing Bull Market Alert positions:

First, Sell Grifols, S.A. (GRFS) to lock in a 6.12% gain. This stock has lost its momentum and there are better places to put your money to work.

Second, I am recommending that you take three new options positions.

1) Buy the Visa (V) September $215 call options (V140920C00215000). After its sharp sell-off over the past few months, this blue chip stalwart looks like it’s back on track.

2) Buy the AbbVie (ABBV) $55 August call options (ABBV140816C00055000). The biotech sector is regaining its momentum and this pick is an excellent way to profit from that turnaround.

3) Buy the Bank of Ireland (IRE) $16 October call options (IRE141018C00016000). After pulling back from highs earlier this year, this long-term holding is now resuming its uptrend.

I’ll be back next week with a new Bull Market Alert recommendation.

Portfolio Update

AbbVie Inc. (ABBV) added 0.70%. AbbVie released clinical trial results late last week of a new drug (ABT-199/GDC-0199). This drug boasts an 84% trial success rate for treatment of the most common form of leukemia in the United States. Analysts at Cowen raised their price target on AbbVie to $62 from $56 and expect the company’s earnings growth to be among the strongest in its group. ABBV is a BUY.

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EOG Resources, Inc. (EOG) gained 1.76% last week and hit a new 52-week high. EOG holds core positions in some of the best shale regions — the Permian, the Bakken and a massive holding in the Eagle Ford region. EOG’s land assets are the “envy of the industry.” EOG is a BUY.

Tata Motors Limited (TTM) fell 8.50% last week. Tata Motors reported some news last week, pushing its stock price lower. Net income for the three months ending March 31 fell slightly, compared to the same quarter last year, as local sales demand fell, offsetting strong sales at its Jaguar Land Rover Automotive PLC unit. TTM dipped below the 50-day moving average (MA) and is now a HOLD.

Visa Inc. (V) rose 1.30%. After breaking above the 50-day MA last week, Visa continued its push upward, experiencing gains each day. Visa is now poised to move back to the $220 level. V is a BUY.

ProShares Ultra Real Estate ETF (URE) had a strong week, adding 1.76%. This leveraged bet on real estate pushed higher last week to come within pennies of its very recent 52-week high. As real estate continues to regain its composure, your leveraged bet through URE will gain nearly twice as much as several other non-leveraged real estate plays. URE is a BUY.

Mobile Telesystems OJSC (MBT) remained flat for its first week in your portfolio. This bet on Russia’s largest mobile service provider just got a bit sweeter as Morgan Stanley recently published a positive report on MBT, putting a $20 price target on the stock. Morgan Stanley reported that MBT was executing in a solid manner and delivering sound performance in core Russian markets. MBT also ended Q1 2014 with EBITDA (Earnings before Interest, Taxes, Depreciation and Amortization) 0.5% ahead of analysts’ consensus estimates. MBT is a BUY.

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Nicholas Vardy

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