In his first Executive Decision segment of "Mad Money" last Friday, Jim Cramer spoke with Bill Newlands, president and CEO of Constellation Brands Inc. (STZ) , the beer, wine and spirits maker that on Friday posted an earnings beat on a 6% rise in sales. The company suspended its forward-looking guidance, however, as bars and restaurants are closed.
Newlands said there has been a sizable channel shift in recent weeks as consumers switch from drinking at restaurants to taking their beer and wine home. When asked about inventory levels, Newlands said Constellation has about 70 days of inventory on hand, but in many parts of the country alcohol is considered essential, so its factories continue to operate and distribution remains strong.
Newlands responded to why he's chosen to suspend guidance by saying no one has seen an environment like we're in now. He said it would be irresponsible to issue guidance in such a fluid situation.
Let's check if the charts of STZ are still fluid. We looked at the charts of STZ last Friday before the close, but the broad market is opening strong here on Monday and STZ is off to a good start, too.
In this daily Japanese candlestick chart of STZ, below, we can see that prices closed higher on Friday but below their opening. Thursday's candle was a potential hammer reversal and today's candle could be a delayed confirmation of sorts. The key trade for STZ is $150.93, as that should refresh the uptrend.
Bottom line strategy: Movement in the broad market can account for a lot of a stock's movement. STZ could ignore its bearish clues and follow the broad market higher.