It was a mixed week for U.S. stock markets, with the Dow Jones up 0.73%, the S&P 500 rising 0.38% and NASDAQ dipping 0.23%. The MCSI Emerging Markets Index (EEM) also dropped 1.49%.
Big gainers in your Bull Market Alert portfolio included LifeLock, Inc. (LOCK), up 5.27%; Gilead Sciences Inc. (GILD), recovering 4.26%; the WisdomTree Japan Hedged Equity ETF (DXJ), jumping 3.84%; Norwegian Cruise Line Holdings (NCLH), adding 3.62%; and the Bank of Ireland (IRE), rising 3.58%.
Several of your positions hit new 52-week highs. These include ProShares Ultra Nasdaq Biotechnology ETF (BIB), WisdomTree Japan Hedged Equity ETF (DXJ), Euronet Worldwide (EEFT) and Norwegian Cruise Line Holdings (NCLH).
- With your February $17 LifeLock call options (LOCK150220C00017000) up 60%, I recommend you sell half of your options here to lock in these quick double-digit percentage gains.
- With the U.S. dollar continuing to strengthen, and 90% of Priceline.com’s revenue denominated in non-U.S. currencies, I am recommending you sell Priceline.com (PCLN) for a gain of 3.45%. Recall, you’ve already booked triple-digit percentage option gains on this one.
- Your short position in PowerShares DB Commodity Tracking ETF (DBC) is now up 10.51%. You’ve also already booked double- and triple-digit percentage option gains in this one. If DBC rises to $20.27, buy back your position to lock in at least a 10% gain in this position.
You have a number of very strong momentum stocks in your Bull Market Alert portfolio. And I must confess, I have been waiting for a pullback on these positions before I made new options recommendations on them.
Alas, almost all have just kept on going higher.
As the chart below from sentimentrader.com confirms, December is a strong seasonal time of the year. Historically, we have another week before the market breaks out. But this is the time of the year when it is worth placing some big bets.
So this week, I am throwing caution in the wind somewhat by making new option recommendations on several of your current Bull Market Alert holdings, in the expectation of some solid gains in them over the coming three to four weeks.
- Buy the Gilead Sciences (GILD) February 2015 $105 call options (GILD150220C00105000). This stock has sorely lagged the biotech sectors in the past few months, but now looks on the way to recovery. J.P Morgan just upped its price target on the stock to $120. The option last traded at $6.50 and expires on February 20.
- With Ireland’s sovereign long-term rating recently boosted to A from A- by S&P on Friday, and Bank of Ireland (IRE) just having broken through a point of technical resistance, buy the January 2015 $17 Bank of Ireland call options (IRE150117C00017000). The option last traded at $0.76 and expires on January 17.
- With the Japanese market grinding higher and the yen tumbling lower, buy the WisdomTree Japan Hedged Equity ETF (DXJ) January 2015 $57 calls (DXJ150117C00057000). The option last traded at $1.84 and expires on January 17.
Portfolio Update
The Bank of Ireland (IRE) gained 3.58%. IRE continued higher last week on momentum as it neared the important $17.00 price level. A close look at the chart also reveals a significant spike in volume last Friday as IRE moved to a high of $17.18. A firm move higher here could translate into an extended bull run for this largest of the recovering Irish banks. IRE is a BUY. Note the new option recommendation above.
Gilead Sciences Inc. (GILD) rose 4.26% last week. Although Gilead Sciences has been trading sideways over recent weeks, GILD popped on Friday to breach above its 50-day moving average (MA), only to fall just pennies back below. This move came on the back of a Barron’s post that took a look into the future success generated by the strong early performance of GILD’s Hepatitis-C drugs. In fact, the post estimated that GILD could generate $30 billion in cash over the next two years and $80 billion over the next five years. That kind of cash would allow GILD to grow in many significant ways. GILD is a HOLD for the moment — though go ahead and buy the options, as I recommend above.
ProShares Ultra Nasdaq Biotechnology ETF (BIB) added 2.54% to hit another new 52-week high. It is the very success of companies such as Gilead Sciences that is fueling a broad bull run across the biotechnology sector. And, profits are rolling into your portfolio at a 2x pace due to the leveraged nature of BIB. BIB is a BUY.
WisdomTree Japan Hedged Equity ETF (DXJ) jumped 3.84%, also marking another 52-week high. The gains not only continued last week via this hedged position in your portfolio but showed signs of accelerating momentum as well. With the remarkable strength of the U.S. dollar shining over recent months, and continuing, this fund is well positioned to continue gains from this trend alone. DXJ is a BUY. Buy the options on this one as I recommend above.
Norwegian Cruise Line Holdings (NCLH) added 3.62%. The positive news from Norwegian’s recent acquisition continued to burn bright for another week as this stock hit another new 52-week high. Barclays also reinstated coverage on NCLH, setting an “Overweight” rating along with a $53.00 price target. This is a potential 16.53% move above last Friday’s close. NCLH is a BUY. I will recommend options on this play once it pauses for breath.
LifeLock, Inc. (LOCK) gained 5.27% for its opening week in your portfolio. LOCK ranked 65th in the “Internet” category for the fastest-growing companies in North America on Deloitte’s 2014 Technology Fast 500(TM) list. This produced a hefty spike in volume last Friday as shares traded at a frantic pace, pushing LOCK higher. LOCK is a BUY.
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.
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