We’re selling 100 shares of Morgan Stanley at roughly $100.56 each. Following Wednesday’s trade, Jim Cramer’s Charitable Trust will own 1,150 shares of MS, decreasing its weighting in the portfolio to 3.62% from 3.93%. We’re raising cash Wednesday into the stock market’s post-consumer price index gains to stay disciplined with a very overbought signal from the S & P 500 Short Range Oscillator . This technical tool, which Jim and the Club have relied on over the years, entered the session at plus 7.6% — its most overbought level since late December. Trying to anticipate what the Oscillator will do next is difficult, but we can only imagine the market will be even more overbought after Wednesday’s gains. Overbought doesn’t always equal sell —much like oversold doesn’t always mean buy — but we strive to be disciplined investors who take profits as stocks move up. So, when the Oscillator says the market is very overbought, it acts as our wake-up call to scrutinize positions and take some stock off the table. MS 5Y mountain Morgan Stanley 5 years Bank stocks have been on a tear lately, and Morgan Stanley has broken out to a new one-year high since our last small trim on May 6 , gaining roughly 7% compared to the 2% move in the S & P 500 over that stretch. Even though we like the bank for its still-solid 3.4% annual dividend yield and healthy buyback, we are trimming the position Wednesday because these have been hard-fought gains that we don’t want to give back in case the rebound in IPO activity and M & A losses steam. We’re a little confused to see Games Global withdraw its planned initial public offering the other day, citing market conditions, given Wall Street’s run back to new highs. This is probably a one-off situation and don’t think this will be the start of a larger trend in IPOs. However, it’s something worth monitoring. We’ll realize a gain of 12% on Wednesday’s Morgan Stanley trim on stock purchased in July 2021. (Jim Cramer’s Charitable Trust is long MS. 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.
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