We’re trimming 3 winning stocks as the market settles into overbought territory
We’re making three trims on Wednesday. We’re selling 10 shares of Meta Platforms at roughly $569.66 each. Following the trade, Jim Cramer’s Charitable Trust will own 265 shares of META, decreasing its weighting to 4.4% from 4.56%. We’re selling 45 shares of Alphabet at $162.52 each. The Trust will own 500 shares of Alphabet, decreasing its weighting to 2.37% from 2.58%. We’re selling 25 shares of Danaher at $269.88 each. The Trust will own 450 shares of DHR, decreasing its weighting to 3.57% from 3.76%. The market has been on a nice run since the Federal Reserve officially kicked off its rate-cutting campaign last Wednesday. From the market close Sept. 17 (the day before the central bank’s decision) through Tuesday, the S & P 500 advanced 1.75%, the Nasdaq Composite gained 2.53% and the Dow Jones Industrial Average increased 1.45%. As a result, the market is now overbought, with the S & P Short-Range Oscillator climbing to 7.36% as of Tuesday’s close. (Anything above a plus 4% indicates the market is overbought; anything below a minus 5% indicates the market is oversold.) We’re inclined to do some profit-taking. We upgraded Meta shares to a 1 rating on Aug. 2, and they are up roughly 17% since then. The social media stock is trading at all-time highs and up again Wednesday with its Connect 2024 event kicking off at 1 p.m. ET — a perfect opportunity to book some gains. We are pretty excited to see what the Meta team reveals, but we also don’t want to be greedy. We’re making a small sale now, leaving plenty on our books to benefit from further upside. This isn’t a call on the company’s fundamentals or growth outlook; it’s just practicing disciplined portfolio management. We will realize a profit of roughly 173% on the shares sold, and we are downgrading the stock back to a 2 rating. Alphabet shares are up about 9% over the past two weeks. And while we are incrementally more bullish on the Waymo opportunity , as Jim Cramer discussed in his Sunday column , we are mindful of the litigation overhang. The Department of Justice is suing Google for antitrust violations, alleging it has monopolized the digital advertising market, and is considering breaking up the company. While we view that scenario has unlikely, it could put a lid on further upside until resolved. We’ll realize a gain of roughly 440% on the shares sold. Danaher is another stock that has outperformed. What better time to do book some profits on a stock than when it’s trading within spitting distance of a 52-week high? We last picked up shares of this name in early July, with shares up about 13% since then. The catalysts remain in place, including an improving funding environment and the prospect of health care stimulus in China. But we acknowledge that we’ve been bumping up against some resistance at this level, so will realize a small profit of about 4% on sales of these shares. (Jim Cramer’s Charitable Trust is long META, GOOGL, DHR. 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.
