Taking Stock and Booking Profits after a Strong Week

It was a very strong week for global stock markets.

The Dow Jones rose 2.13%; the S&P 500 jumped 2.66%; and the NASDAQ leapt 3.17%. The MCSI Emerging Markets Index rocketed 4.65%.

Big gainers in your Bull Market Alert portfolio included the ProShares Ultra Nasdaq Biotechnology ETF (BIB), which jumped 12.50%; JA Solar Holdings Co. Ltd. (JASO), which soared 6.41%; Ambarella Inc. (AMBA), which added 5.77%; and Halyard Health Inc. (HYH), which climbed 5.69%.

Several of your positions hit new 52-week highs. These included the ProShares Ultra Nasdaq Biotechnology ETF (BIB), Halyard Health Inc. (HYH), WisdomTree Europe Hedged Equity Fund (HEDJ) and Ambarella Inc. (AMBA).

This week’s Bull Market Alert is all about locking in some big stock and options gains, as well as taking a new option position in a current holding.

1) Your leveraged bet on biotech through the ProShares Ultra Nasdaq Biotechnology (BIB) has paid off handsomely and is up 58.39% as of Friday’s close.

Although I believe the long-term bull market in the biotech sector remains fully intact, there are signs that after such a parabolic rise, the sector may be due for a pullback.

Data from sentimentrader.com points out that more than 80% of stocks in BIB were trading above their 10- and 50-day averages, and nearly 20% of components hit a 52-week high. Of the nine days that met these conditions since 2001, BIB’s three-week return thereafter was positive only once.

So raise your stop to $177.15 to lock in at least a 55% gain in this position.

2) With your April $45 call options in Halyard Health, Inc. (HYH) (HYH150417C00045000) expiring within a month, this is a good time to sell your options for a 17.95% gain.

3) Raise your stop in the WisdomTree Japan Hedged Equity ETF (DXJ) to $54.30 to lock in close to a 10% gain in this position.

4) Raise your stop in the WisdomTree Europe Hedged Equity ETF (HEDJ) to $66.15 to lock in at least a 10% gain in this position.

5) Sell your position in India’s HDFC Bank Limited (HDB) at a slight loss.

Indian banks have run out of steam in the past few weeks. This is despite two interest rate cuts by India’s central bank and the International Monetary Fund announcement that estimates the Indian economy will expand at a rate of 7.5% over the next 12 months.

When markets react poorly to such bullish news, the internals of a market are weaker than they appear, and there are better places to put your money to work.

6) Finally, credit card stocks have become oversold in recent weeks, as has your position in MasterCard (MA).

Recall that on March 6, you booked 92.5% gains in your April $85 MasterCard call options.

With the fundamentals of MasterCard still intact, this is a good time to place another option bet on MasterCard by buying the May $90 calls (MA150515C00090000), which last traded at $3.05 and expire May 15.

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

Portfolio Update

The Bank of Ireland (IREBY) gained 3.34% last week. This position is still generating gains in your portfolio even as it is scheduled to halt trading on April 22. Europe is on the rebound and its gross domestic product (GDP) growth rate is expected to hit 2% over the next few years. However, for the same period, Ireland’s expected GDP gain is nearly double that rate. IREBY is technically a BUY, but I am moving it to a HOLD. I expect to recommend that you exit this position in the next few weeks.

ProShares Ultra Nasdaq Biotechnology ETF (BIB) jumped 12.50% to hit another new 52-week high. The bull run in biotech continues strongly so far this year as several of the big-name stocks that make up biotech exchange-traded funds (ETFs), such as BIB, are doing very well in their own right. Year-to-date, Regeneron is up 18%, Celgene rose 13%, Vertex Pharma climbed 12% and Gilead Sciences jumped 9%. BIB is a BUY. Raise your stop to a tight $177.15.

WisdomTree Japan Hedged Equity ETF (DXJ) added 1.06%. The Bank of Japan is keeping its stimulus efforts firmly in place even as consumer price inflation lingers closer to 0%, despite its 2% inflation target. The NIKKEI market opened strongly this morning as well, jumping another 1%. DXJ is a BUY. Raise your stop to $54.30.

Halyard Health Inc. (HYH) rose 5.69% last week to hit a new 52-week high at a price level this stock last visited in early January. Although this stock has been on a measured rise since its March 4 earnings report, investors have picked up the buying pace quite a bit over the past week. HYH is a BUY.

WisdomTree Europe Hedged Equity Fund (HEDJ) gained 0.39%. HEDJ hit a new 52-week high early last week, consolidating its six straight weeks of gains. HEDJ should continue its rise soon enough. HEDJ is a BUY. Raise your stop to $66.15.

JA Solar Holdings Co. Ltd. (JASO) jumped 6.41%. Investors finally woke up and started buying JASO after its excellent earnings report last week. Firmly above the 200-day moving average, JASO is primed to make gains in the weeks ahead. JASO is a BUY.

Ambarella Inc. (AMBA) added 5.77% for its first week in your portfolio. This play on “the Internet of Everything” also spiked to a new 52-week high just last Friday. This is a particularly hot sector right now and has been in a gaining momentum over recent months. In fact, a similar play on this trend in my newsletter, The Alpha Investor Letter, is up over 100% in just the last several months. AMBA is a BUY.

Newly Updated Special Report

As a courtesy, I invite you to view the newly updated version of The Top 12 Stocks for 2015, which features three of my top investment recommendations from the recent Orlando MoneyShow, 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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