We are buying 25 shares of Nvidia (NVDA) at roughly $151.52 each; and 150 shares of TJX Companies (TJX) at roughly $62.78. Following Wednesday’s trades, Jim Cramer’s Charitable Trust will own 350 shares of Nvidia, increasing its weighting in the portfolio to 1.82% from 1.69%; and 850 shares of TJX, increasing its weighting in the portfolio to 1.81% from 1.5%. We’re buying a couple of stocks into weakness Wednesday due to the oversold nature of the broader market. After Tuesday’s session, the S & P Oscillator moved to minus 7.06%. As a reminder, any time the Oscillator moves below minus 4%, it signals that the market is oversold, which means it could be due for a bounce. If you have been following us over the years, then you already know what our discipline states. We look for bargains and hold our nose and buy whenever the market is oversold, just like how we hold our nose and sell when the market is overbought . Of course, the Oscillator could become more oversold from here and the market could continue to drop. There have been several instances this year when we have seen the Oscillator reach minus 7% and still go lower. In fact, this happened this summer. On June 14, the S & P Oscillator was minus 7.66% and it fell to minus 10.51%, the trough, on June 16. Although June 14 didn’t mark the exact low in the Oscillator (or the market), the good news is that the downside was limited by that point. The Dow Jones Industrial Average closed at 30,364.83 on June 14, fell about 1.5% to 29,927.07 by June 16, but ultimately rallied to 31,500.68 on June 24. We bring this up because of course the market could continue to fall from here. We cannot predict the day-to-day gyrations of the market. However, the risk-reward gets better as prices come in. That’s why we typically view weakness as opportunities. At a minimum we think the oversold Oscillator serves as a reminder that stocks have been hit hard in a very short period and the time has come to start looking for profitable, high quality companies that are trading at bargains. So yes, that means holding our nose and buying shares of semiconductor company Nvidia, which continues to slide after issuing a weaker-than-expected outlook last week. Here we are buying back 25 shares of the 200 we sold in early April at around $220 per share. We previously purchased 50 shares back in May at around $173 per share. Although the length of the gaming inventory correction remains an uncertainty and the resilience of the data center is a new question mark, the company has several new product launches coming out in the next couple of quarters and those should help support growth. Also, we believe Nvidia’s upcoming developers GTC conference, starting Sept. 19, will be a bullish event and we do not want to be too negative ahead of this. At the same time, we think it is prudent to be disciplined and only buy in small increments. We plan to buy another 25 shares at around $140 and pick up more if it falls further from there. For TJX, we are continuing our slow buildup of this position into weakness. We like shares of the company behind T.J. Maxx, Marshall’s and HomeGoods because we think the purchasing environment for off-price retail has never been better. Retailers are working frantically to right-size inventory positions and discount items to get them out the door. One way they clear out their excess inventory is to sell merchandise to off-price chains at fire sale prices, which then allows TJX to offer high-quality product and value prices to their shoppers. (Jim Cramer’s Charitable Trust is long NVDA and TJX. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
Source: Business - cnbc.com
