Crammer said: Its new buy rally on NYSE and we are with him

By -
Cramer usually scoffs at technical analysis and its accompanying stocks charts. In fact, he likened the practice to astrology during this week’s Game Plan. He just can’t get with the idea that because some graph says a stock will drop, it will, so do the analysts at stockpm concur. We usually despise technical analyst, cause their are not fundamental behind those kinds of analysis, but that discussion is for some other day.

But admittedly there is one tool of technical analysis that hasn’t failed Cramer, he said, since 1987. The Standard & Poor’s Oscillator. It measures the amount of stock buying relative to selling in the market.

When the buying and selling are about the same, the oscillator reads zero. Multiple days of buying, though, push the oscillator up. It signals that stocks are out of equilibrium. Over the past three years, any time the oscillator hit +5 it’s been a sign that profits should be taken, because some kind of decline is inevitable.



The reverse is also true. Overselling sends the oscillator down. No matter what the market has looked like, Cramer has always bought stocks when the oscillator’s dropped to –5, he said, because that dip has been followed by a rebound.

Well, Friday morning the S&P Oscillator hit –6.

“There has been no time in the last three years – not once – that we didn’t have a huge rally after this oscillator has fallen to these levels,” Cramer said. “Very simply, I believe that means it’s time to buy.”

The banks are likely to rally, he said, specifically mentioning Wells Fargo
WELLS FARGO & CO NEW
WFC

26.08 0.53 +2.07%
NYSE
Quote | Chart | News | Profile
[WFC 26.08 0.53 (+2.07%) ] and JPMorgan Chase
JPMORGAN CHASE & CO
JPM

39.58 1.57 +4.13%
NYSE
Quote | Chart | News | Profile
[JPM 39.58 1.57 (+4.13%) ]. Lehman Brothers
LEHMAN BROTHERS HLDGS INC
LEH

25.81 3.11 +13.7%
NYSE
Quote | Chart | News | Profile
[LEH 25.81 3.11 (+13.7%) ], though, should not be bought.

Some tech stocks should move. Cramer said he likes Research in Motion
RESEARCH IN MOTION LIMITED
RIMM

132.96 3.37 +2.6%
NASDAQ
Quote | Chart | News | Profile
[RIMM 132.96 3.37 (+2.6%) ], Salesforce.com
SALESFORCE.COM INC
CRM

72.79 2.58 +3.67%
NYSE
Quote | Chart | News | Profile
[CRM 72.79 2.58 (+3.67%) ], Hewlett-Packard
HEWLETT PACKARD CO
HPQ

47.45 0.48 +1.02%
NYSE
Quote | Chart | News | Profile
[HPQ 47.45 0.48 (+1.02%) ], Google
GOOGLE INC
GOOG

571.51 18.56 +3.36%
NASDAQ
Quote | Chart | News | Profile
[GOOG 571.51 18.56 (+3.36%) ] and IBM
INTL BUSINESS MACHINES
IBM

126.15 2.30 +1.86%
NYSE
Quote | Chart | News | Profile
[IBM 126.15 2.30 (+1.86%) ].

Ingersoll-Rand
INGERSOLL RAND CO LTD BERMUDA
IR

39.76 1.11 +2.87%
NYSE
Quote | Chart | News | Profile
[IR 39.76 1.11 (+2.87%) ], Emerson Electric
EMERSON ELECTRIC CO
EMR

55.92 1.84 +3.4%
NYSE
Quote | Chart | News | Profile
[EMR 55.92 1.84 (+3.4%) ] and Parker Hannifin
PARKER HANNIFIN CORP
PH

78.67 2.17 +2.84%
NYSE
Quote | Chart | News | Profile
[PH 78.67 2.17 (+2.84%) ] are new-tech names worth owning. L-3 Communications
L 3 COMMUNICATIONS HLDGS INC
LLL

97.93 0.51 +0.52%
NYSE
Quote | Chart | News | Profile
[LLL 97.93 0.51 (+0.52%) ] in defense got the nod as well.

Even the housing stocks could earn a profit, Cramer said. Owens-Corning
OWENS CORNING INC
OC

23.93 0.05 +0.21%
NYSE
Quote | Chart | News | Profile
[OC 23.93 0.05 (+0.21%) ] and Toll Brothers
TOLL BROS INC
TOL

19.91 0.58 +3%
NYSE
Quote | Chart | News | Profile
[TOL 19.91 0.58 (+3%) ] stand out. In retail, Costco
COSTCO WHOLESALE CORP
COST

70.32 2.12 +3.11%
NASDAQ
Quote | Chart | News | Profile
[COST 70.32 2.12 (+3.11%) ], Wal-Mart
WAL MART STORES INC
WMT

59.18 0.07 +0.12%
NYSE
Quote | Chart | News | Profile
[WMT 59.18 0.07 (+0.12%) ] and Jones Apparel
JONES APPAREL GROUP INC
JNY

15.33 0.57 +3.86%
NYSE
Quote | Chart | News | Profile
[JNY 15.33 0.57 (+3.86%) ] made the list, and so did VF Corp
VF CORP
VFC

72.78 2.68 +3.82%
NYSE
Quote | Chart | News | Profile
[VFC 72.78 2.68 (+3.82%) ].

What can’t you own? Here’s the rule, according to Cramer: “You don’t buy what’s overbought when you’re oversold.” That means steer clear of oil and gas stocks for the time being, he said. There could be a chance to buy these names in the near future at a better price.

“When the oscillator signals extreme I think you have to make a move,” Cramer said. “And I believe the move is now to buy, buy, buy.”

“The rally you saw today is the beginning of a multiday rally,” he continued. “You haven’t missed a thing.”

Comments

Post a Comment

Popular posts from this blog

Adani Power (IPO)

By CROW -
Adani Power initial public offering (IPO) witnessed huge investor interest and was subscribed 6.86 times. The issue received bids for more than 170 crore shares as against the issue size of 30,16,52,031 shares, as per the data available on the NSE website . Qualified institutional investors have given strong response to the issue followed by non-institutional investors. Their portion subscribed 12.93 times and 2.2 times, respectively. Retail investors' portion subscribed just 0.5 times. Also read: Subscribe to Adani Power IPO: Experts The price band has been fixed between Rs 90 and Rs 100 per equity share. The minimum bid lot has been fixed at 65 equity shares by the company in consultation with the global coordinator and book running lead manager. The issue will close on July 31, 2009. The issue constitutes 13.84% of the post-issue paid-up equity share capital of the company. The issue includes a reservation of up to 8,000,000 equity shares for eligible employees. The iss...
Read more

Stock Buzz Jan 14th 2010

By CROW -
02:23 PM Thursday , 14 January It is a steady session for our market. Sensex is trading at 17,601, up 90 points and Nifty is at 5,264, up 30 points from the previous close. Source : IRIS 01:51 PM Thursday , 14 January Our market is seeing some turbulence and trending little lower. But the midcap out performance continues. Sensex is trading at 17,540, up 30 points and Nifty is at 5,246, up 12 points from the previous close. Source : IRIS 01:50 PM Thursday , 14 January The market is trading firm. Sensex is trading at 17,588, up 78 points and Nifty is at 5,262, up 28 points from the previous close. Source : IRIS 01:49 PM Thursday , 14 January At this hour the market has come off the morning`s high but still trading with gains. Asian markets are also looking firm. Sensex is trading at 17,569, up 59 points from its previous close, and Nifty is at 5,257, up 23 points. Source : IRIS 09:46 AM Thursday , 14 January The market opens on a reasonably strong note. Earlier, the ...
Read more

Trend watch: Industrial growth decelerates in July

By CROW -
The just released industrial growth numbers point to a slowdown in the economy. The Central Statistical Organization`s quick estimates of Index of Industrial Production (IIP) for the month of July 2007 fell far below the expectations. The general index stands at 252.2, which was 7.1% in July 2007 compared with 13.2%, a year ago. The cumulative growth for the period April-July 2007-08 witnessed a decline at 9.6% as against 11.1% over the corresponding period of the pervious year. The industrial production for the mining, manufacturing and electricity sectors grew 4.9%, 7.2% and 7.5% respectively in July`07. During the same period in 2006, these sectors posted growth of 5.1%, 14.3% and 8.9% respectively. The cumulative growth during April-July 2007-08 over the corresponding period of 2006-07 in the three sectors has been 3.1%, 10.3% and 8.1% respectively compared with 4%,12.3% and 6.1%, a year ago, which moved the overall growth in the general index to 9.6%. Higher interest rates adverse...
Read more