The European Central Bank (ECB)'s bold stimulus action Thursday sets European stocks up for juicy gains, says Jack Ablin, chief investment officer at BMO Private Bank.

The ECB cut its deposit rate for banks to minus 0.1 percent, reduced its benchmark rate by 10 basis points to 0.15 percent and created a 400 billion-euro ($542 billion) lending facility for banks.

The new easing already has lit a fuse under European stocks, with the Euro Stoxx 50 Index of euro-area equities was late Monday at 3,297.54, having earlier hit a near six-year high of 3,302.77 points.

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The "baton of central bank easing" is being passed from the Federal Reserve to the ECB, which bodes well for European stocks, Ablin told CNBC.

"These [European] markets are trading at probably a 15 percent discount to the U.S.," he said. "I think that's where the next leg of this rally is going."

But be careful, because fair value for the euro is now $1.20 or perhaps less, compared with the euro's actual level of $1.36439 early Friday, Ablin warned.

"The best way to play this, as we're doing, is invest in Europe but hedge that currency back to the U.S. dollar because otherwise you are going to take two steps forward and then one step back with a currency that is declining," he said.

Other investors were impressed by the ECB as well.

"[ECB President Mario] Draghi's big statement for me is that the ECB is accelerating plans for QE [quantitative easing]," Alan Higgins, chief investment officer at Coutts & Co. in London, told Bloomberg. "He's been quite explicit."

Editor's Note: Secret Wall Street Calendar Uses Strange ‘Crash Alert System,’ Gets 18.79% Annual Returns

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