Cramer is a fundamental investor. However he's always intrigued by the charts, especially when they signal something as radical as this.
According to insights from Tim Collins, a top chart analyst and Cramer colleague at RealMoney.com, steel may be making a definitive bottom.
Looking at the daily chart of the Market Vectors Steel ETF, the SLX, Collins has identified a potentially bullish pattern. (This ETF contains Rio Tinto, ArcelorMittal, Nucor, Reliance Steel and other global companies.)
Collins says the Steel ETF has experienced a short-term bounce since late June, and this bounce has accelerated over the last four days with the SLX breaking out from an ascending triangle pattern.
Although the SLX may encounter resistance at $44, Collins says if it can pierce that level, the chart will make an inverse head and shoulders pattern – an extremely bullish development.
Should that happen, he can see the SLX printing $51.
Looking at the weekly charts of the SLX Collins believes other patterns confirm the conclusion.
He says the SLX has already broken out above a first crucial ceiling of resistance. The next key level, he says, is $46. If the SLX can break above $46, he could see the steel ETF rallying to $58 over the next six to twelve months.