Technology in addition to oil stocks have rebounded after the fourth-quarter sell-off in addition to investors should be conscious of how much farther they could run, CNBC’s Jim Cramer said Tuesday.
He looked at chart patterns provided by commodity broker Carley Garner, co-founder of DeCarley Trading, to see where the stock prices could be headed. Technical analysis examines the cost history to determine when to buy or trade a security.
“Oil in addition to technology have led This specific market higher for months in addition to right now the charts, as interpreted by Carley Garner, suggest which they’re running into some resistance,” the “Mad Money” host said.
Cramer highlighted which crude in addition to the tech-heavy Nasdaq 100 have been trading in near lockstep over the past 180 sessions — peaking at the same time in October in addition to bottoming at the same time in December — although tech has bounced harder.
“yet she thinks both groups could have, alas, one more hurrah, with oil having more potential upside,” he added. “My view? Hey, I’ll take the idea.”
Cramer said Garner’s analysis suggests the tech run may be unsustainable, yet the sector could hit fresh highs before investors begin selling in addition to taking profits off the table. Even though big institutions are still bearish on tech stocks in addition to short-sellers have gotten squeezed, Cramer said which negativity will be a positive for the bull market.
yet the gears appear to be changing. Based on moves illustrated in a weekly chart dating back to 1999, Garner thinks the rally can only be sustained on legitimate bullish bets, the host said. She argues the the Nasdaq 100 could rise another 3% by current levels to touch its all-time high in addition to trigger a short-lived pullback. If the index breaks above which 7,835 mark, the idea could run as high as 8,455 — 11% higher by current levels.
If her analysis turns out to be wrong, the floor of support will be at 6,550 — 13% below current levels — in addition to a more unfavorable one of 5,610 — 26% under, Cramer explained.
“Whether or not This specific tech rally has one more leg higher, or not, Garner says which sooner or later we’re going to get a correction in addition to she expects the idea to be fairly painful,” he said. “So if the tech cohort keeps climbing by here, she recommends gradually ringing the register on the way up to protect your profits.”
On the oil side, Cramer said Garner includes a “terrific” track record. She called which oil could rebound by the low $40s in late 2018 to $63, he said. Oil has reached $64, according to the weekly chart of West Texas Intermediate crude.
She thinks the bulls could be in long-term position to take oil to $80 a barrel, despite the ceiling of resistance at current levels, Cramer explained. If crude can break above $64 in addition to through $79, prices could run to $85 where bear traders could gain an edge, he said.
“inside short-term, though, Garner says oil could pull back to its floor of support at $55, yet she thinks which’s unlikely in addition to you’d want to be a buyer at those levels, anyway,” Cramer said.
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