Cramer said there's a lot to like about Corteva. The company's seeds and crop protection products are terrific and the combination of assets from both Dow and DuPont makes this spinoff much stronger than either company would be alone. There's just one problem however - timing.
Cramer noted that the combination of bumper crops last year, a trade war this year and flooding in the Midwest, is creating a tough time for farmers and Corteva isn't expected to see great earnings until 2020. Given shares trade at 20 times expected earnings, Cramer said he'd hold off buying this great company for now and wait until we have more clarity on what 2020 will actually deliver for shareholders.
Let's take a look at the chart of CTVA to see if it provides any clarity.
In this daily bar chart of CTVA, below, we can see just a couple months of trading but we can still draw some inferences. Prices are above the declining 20-day moving average line. The pattern of trading so far looks like an equilateral triangle so we could break to the upside or the downside. Trading volume has declined from the start of trading which is typical for triangles.
The daily On-Balance-Volume (OBV) line has turned up in July signaling more aggressive buying, and the Moving Average Convergence Divergence (MACD) oscillator has crossed to the upside for a buy signal.
Bottom line strategy: Timing is important and if this is a triangle formation we should see a breakout very soon. If you decide to get involved from the long side remember to risk just below $26.