CNBC’s Jim Cramer on Tuesday broke down a seasonal trading pattern in retail stocks that he believes investors should be familiar with.
The “Mad Money” host checked out well-known tech Larry Williams’ stock analysis, which was taking previous trades into account to determine which direction Costco, Amazon, Walmart and Shopify stocks could head in the early spring days.
“If history is a guide, Williams is betting that a rising tide in April can lift all retail ships,” Cramer said.
Every stock is down year over year, with the exception of Shopify, which is trading 2% higher. Costco is down 10% so far this year after rising 28% in 2020.
These retail-focused stocks are capable of rising higher in the short term, Williams says. Cramer called it an “Easter rally” and named it after the holiday that was less than two weeks away.
“I think the move may have already started,” he said.
Analyzing Williams’ charts, Cramer noted how the retail group tends to rebound in the days before or after the Easter break. However, he paused and recommended how market participants could trade in the moment and make a profit.
“If you’re concerned about rotation, you might want to take advantage of the rally at major retailers to call the register,” Cramer said. “As much as I like these companies long-term and don’t want to trade them, I can’t blame anyone for taking profits.”
Disclosure: Cramer’s charitable foundation owns shares in Walmart, Costco, and Amazon.
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