There's more to a booming economy than tech stocks, Jim Cramer told his "Mad Money" viewers Monday. In fact, for most seasoned investors, high-flying tech stocks are a source of funds to buy what's really working.
Never forget that stocks follow the laws of supply and demand. That means when the economy heats up, it's the physical goods that are in short supply, not the digital ones.
A booming economy is when you buy the mining and mineral stocks, the infrastructure stocks and the transports, Cramer told viewers.
So, let's check out the charts of AECOM (ACM) , a major infrastructure firm.
In this daily bar chart of ACM, below, we can see that prices have more than doubled in the past 12 months. Prices are above the rising 50-day moving average line and the rising 200-day moving average line. The On-Balance-Volume (OBV) line has been steady/flat for the past five months. The Moving Average Convergence Divergence (MACD) oscillator has been above the zero-line since August and could be close to a new outright go-long signal.
In this long-term weekly bar chart of ACM, below, we look at the price history going back to 2011. Prices have been in a consolidation pattern since 2013 and have broken out on the upside. This is a huge pattern and that means it is capable of producing huge long-term gains. ACM is trading above the rising 40-week moving average line. The weekly OBV line is bullish and so is the MACD oscillator.
In this weekly close only five box reversal Point and Figure chart of ACM, below, we can see a tentative long-term price target in the $201 area.
Bottom line strategy: Traders and investors could go long ACM at current levels, risking a close below $60. The $200 area is our long-term price objective.