Game Plan: Trading the Week Ahead
Cramer’s Game Plan for next week is simple, and it’s all about trading earnings. Here’s how it breaks down:
Construction giant McDermott reports earnings after the bell. But Cramer doesn’t care about MDR because its business is too hard to gauge. But if the stock reports lousy numbers and takes a hit, it will likely take down fellow infrastructure play and Cramer fav Foster-Wheeler . If that happens, it will be a great opportunity to buy FWLT at a lower price. Cramer is confident it will be a good buy because its recent earnings report showed that its main businesses are performing well.
Wal-Mart reports before the open. Cramer thinks the world’s biggest retailer is headed to $60 and could get there by Friday. He’d buy it ahead of the quarter and, for a nifty pairs trade, would sell Liz Claiborne , which also reports. LIZ has too much exposure to department stores and Cramer thinks the turnaround there is years away.
Deere , long a favorite of Cramer’s, reports before the bell. This company is dominating thanks to the food and oil crises. As the premier American manufacturing company, Deere benefits from farmers spending more money worldwide to capitalize on the weak dollar. It also wins on ethanol, a booming business in Latin America, superior technology and a global increase in plantings. However, the stock has shown that it can act a bit crazy when it reports. So Cramer recommended putting on half a position Tuesday and then the other half after the earnings come out, unless of course the stock is up so much that you can’t justify paying up.
Hewlett-Packard reports earnings and Cramer thinks it will have a big quarter. But it won’t matter. This stock is infamous for giving up its gains the next day after a nice quarter. Cramer would sell half a position ahead of the release and the other half right after. It doesn’t mean anything that HPQ is best of breed with great CEO in Michael Hurd. It’s old technology, and Cramer doesn’t want any of that. Owning tech into the summer is a sucker’s bet, he said.
Jim's charitable trust owns Foster-Wheeler.
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