With the market overbought, we’re booking profits in this industrial gas giant
Shortly after the opening bell Friday, we’ll be selling 15 shares of Linde (LIN), at roughly $376.77 each. Following the trade, Jim Cramer’s Charitable Trust will own 190 shares of Linde, decreasing its weighting in the portfolio to 2.54%, from 2.73%. We’re booking profits in industrial gas giant Linde Friday morning, consistent with our discipline of raising cash whenever the market is overbought, according to the S & P 500 Short Range Oscillator . Linde has been a stellar performer this year, gaining more than 15% year-to-date and making new all-time highs. The stock still has significant growth prospects, due to the earnings-compounding nature of its business and incremental wins related to decarbonization. So, our small sale today is simply an effort to lock in our big gains. After Thursday’s session — which saw the S & P 500 gain more than 1% and rally to a new 52-week high —the Oscillator pushed deeper into overbought territory, with a reading of 5.27%. Any reading above positive 4% means the market is technically overbought. And whenever the market is trading in overbought conditions, our approach is to scrutinize every position in the portfolio and look for some shares to trim in preparation for potential softness in the market. Of course, the Oscillator could become even more overbought from here, with stocks moving even higher. But at a minimum, we think an overbought Oscillator serves as a reminder that stocks have had a solid run lately and could be due for a break. It’s also a benchmark that helps us avoid becoming too complacent or greedy . The Linde sale will lock in a gain of about 49% on stock first purchased in February 2021. Additionally, we’re lowering our rating to a 2, meaning we’d wait for a pullback before buying again. (Jim Cramer’s Charitable Trust is long LIN. 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.
