It's not too late to make a bet on stocks that benefit from the reopening of our economy, Jim Cramer told his Mad Money viewers Monday evening. The reopening train is leaving the station with or without you, Cramer added, which makes now the perfect time to buy.
In the manufacturing space, Cramer recommended Caterpillar ( CAT) and said it may finally be time for Nucor ( NUE) to shine. The last time we looked at CAT was on January 28. We wrote then that "I have no knowledge of what CAT is going to report, but I can say that the charts of CAT have weakened so far this month. Earnings numbers could precipitate further declines in the days ahead."
Let's check the charts.
In this updated daily bar chart of CAT, below, we can see that prices made a low and reversed to the upside in late January/early February. Prices are trading above the rising 50-day moving average line. This average was tested at the end of January. The 200-day moving average line is bullish.
The On-Balance-Volume (OBV) line shows a steady rise from March to confirm the price gains. The Moving Average Convergence Divergence (MACD) oscillator is in a bullish alignment above the zero line.
In this weekly bar chart of CAT, below, we see a bullish picture. Prices are in an uptrend. The slope of the 40-week moving average line is bullish.
The OBV line is rising and confirms the price gains. The MACD oscillator is bullish.
In this daily Point and Figure chart of CAT, below, we can see that prices are a bit stretched to the upside. Still, a price target of $290 is being projected.
Bottom line strategy: Shares of CAT are looking extended (overbought) so a pullback to around $200 would not be too much of a surprise. Stability around $200 may turn out to be a buying opportunity.
