Booking Some Profits, Locking in Gains

The correction that I expected in U.S. markets seems to have started last week. The Dow Jones fell 1.52%, the S&P 500 dropped 1.58% and the NASDAQ fell 0.73%. The MCSI Emerging Markets Index tumbled 3.63%.

It was not all bad news for your Bull Market Alert portfolio. Big gainers included JA Solar Holdings Co. Ltd. (JASO), which jumped 8.13%, and the ProShares Ultra Nasdaq Biotechnology ETF (BIB), which added 2.94%.

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

Several of your positions hit new 52-week highs. These included the ProShares Ultra Nasdaq Biotechnology ETF (BIB), HDFC Bank Ltd. (HDB) and the WisdomTree Europe Hedged Equity Fund (HEDJ).

With the market pulling back, its time to book some gains and pare back on some of your positions in your Bull Market Alert portfolio.

So today, I am recommending that you sell your position in the Rubicon Project (RUBI) for a 15.67% gain. Also sell your position in Euronet Services Inc. (EEFT) at roughly break even. You have already raised your stop in the ProShares Ultra Nasdaq Biotechnology ETF (BIB) to lock in at least a 30% gain in this position.

Also, raise your stop in MasterCard (MA) to $79.50, in WisdomTree Europe Hedged Equity Fund (HEDJ) to $61.00 and in WisdomTree Japan Hedged Equity ETF (DXJ) to $51.00.

After such a strong February, it is only to be expected that the market take some time to consolidate its gains. The U.S. market did break out of a trading range to the upside in early February, so that is good news.

I’ll be back next week and I plan to have a new recommendation for your Bull Market Alert portfolio.

Portfolio Update

ProShares Ultra Nasdaq Biotechnology ETF (BIB) gained another 1.52% last week. BIB has spent the better part of the last year ascending to new highs on a regular basis, making gains at a rate of 2x the underlying index. This bull market trend has yet to show any signs of weakening. BIB hit another new 52-week high just last Thursday. This biotech bull market gainer is now up 36% in your Bull Market Alert portfolio and remains a BUY.

WisdomTree Japan Hedged Equity ETF (DXJ) added 1.24%. Goldman Sachs has been making positive comments on the Japanese markets lately. One Goldman investment strategist recently predicted that Japanese stock prices could rise another 12%. With DXJ also benefitting from its hedged currency position, DXJ has more room to run higher. DXJ is a BUY. Raise your stop to $51.00.

Halyard Health Inc. (HYH) rose 0.48%. HYH reported fourth-quarter earnings last Wednesday of $1.59 earnings per share (EPS), beating the $0.77 analysts’ estimate. Revenue came in at $439 million, also beating expectations. With these kind of beats, it’s surprising the stock didn’t move more. Full-year net sales stayed level year over year at $1.7 billion. HYH is a BUY.

MasterCard (MA) added 0.73% over the last five trading days. Keefe, Bruyette & Woods maintained their “Outperform” rating on MA last week and kept its $109 price target in place. This price target represents a possible 20% move above Friday’s close. The Keefe, Bruyette & Woods analyst group also said Citigroup’s 10-year deal to transition its portfolios to MasterCard will provide MA a significant and long-term tailwind. You should have sold all of your remaining options in MA for a 92.5% gain. MA is a BUY. Raise your stop to $79.50.

HDFC Bank Ltd. (HDB) remained flat but managed to hit a new 52-week high early in the week. India’s Central Bank cut interest rates by 0.25% last week to 7.5%. This should add to the bullish pressure on this position. HDB is a BUY.

JA Solar Holdings Co. Ltd. (JASO) jumped 8.13% last week as investors readied for JASO’s earnings report, coming on Wednesday before markets open. JASO just moved above its 200-day moving average (MA) and is comfortably above its 50-day MA to remain a BUY.

iPath S&P 500 VIX ST Futures ETN (VXX) gained 1.49% for its first week in your portfolio. VXX is at the perfect price level to benefit from a bet on a rise in market volatility. An increase in volatility over the coming weeks appears evident as markets seem to be readying for pullback on investor indecision. VXX 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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