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Chart signals 'Buy': Cramer

A reliably bullish chart pattern has captured Cramer's attention.

It's emerged in the chart of Whole Foods.

Cramer has liked Whole Foods for quite some time for fundamental reasons, as a way to leverage the healthy eating theme he believes is sweeping the nation.

But just because a stock, such as Whole Foods, has a strong fundamental theme, that doesn't mean it will rally. Therefore, pros such as Cramer often consult technical analysis to determine if chart patterns confirm an outlook – in this case a bullish outlook.

And according to analysis provided by Tim Collins, the outlook is confirmed and then some.

Specifically, Collins has identified two bullish patterns. The first is a flag pattern that Whole Foods has just broken out of.




Evgeny Kuklev | E+ | Getty Images

It's called a flag because it looks something like a flag; that is a stock rallies very rapidly, making the flagpole, and then trades sideways in a fairly tight range, making the flag.

Once a stock breaks out from the flag and rallies, technicians apply a simple formula to determine how much more it can gain. Specifically, the move higher should be equal to the run up right before the flag.

In the case of Whole Foods Collins expects a gain of $6.50 which would take the stock to $66.50 in a relatively short period of time.

And, as a second positive pattern, Collins noted a so-called bullish crossover in the moving average convergence divergence indicator or MACD. This is an extremely positive signal that Collins calls the chart equivalent of a pink neon sign that flashes "buy this stock."

But that's not all.

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Collins also said the commodity channel index or CCI is in very positive territory. And looking at the weekly chart he sees a similarly bullish flag pattern on the weekly charts.

All told, Collins sees every reason to buy.

"In a country where more and more people want to eat organic and natural, Whole Foods is the place to shop," said Cramer. And if you're an investor looking for upside, technical analysis from Tim Collins suggests Whole Foods is the stock to own.

Call Cramer: 1-800-743-CNBC

Questions for Cramer? madmoney@cnbc.com

Questions, comments, suggestions for the "Mad Money" website? madcap@cnbc.com

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