CNBC’s Jim Cramer broke a seasonal trading pattern in retail stocks Tuesday that he thinks investors should be aware of.
The “Mad Money” host reviewed stock analysis by prominent technician Larry Williams, who took past trading into account to chart how shares in Costco, Amazon, Walmart and Shopify might move during the early days of spring.
“If history is any guide, Williams is betting that an April rising tide will lift all retail ships,” Cramer said.
Every single stock is down for the year, except for Shopify, which is trading 2% higher. Costco is down 10% so far this year after rising 28% in 2020.
These retail-oriented stocks are poised to go higher, Williams says, if only in the short term. Cramer called it an “Easter rally,” and named it after the holidays less than two weeks away.
“I think the movement has already started,” he said.
Reviewing Williams’ chart analysis, Cramer noted how the retail group tends to rebound in the days before or after the Easter break. However, he stopped short of recommending how market participants could trade at the time and make a profit.
“If you are concerned about churn, you may want to use the rally at essential retailers to ring the record,” Cramer said. “As much as I like these companies in the long run and don’t want to market them, I can’t blame anyone for making a profit.”
Disclosure: Cramer’s charitable trust owns stock in Walmart, Costco, and Amazon.