Mad Money

Cramer: Best bets for second half

Aerospace names ready to blast off: Cramer

With only a handful of days left in June, Jim Cramer is scouring the market, looking for new ideas for the second half.

And as he sifted through a pile of earnings and other data, Chevron grabbed his attention, largely because the stock just broke out of a trading range.

For the past year, Cramer says, Chevron had been stuck in a rut. "It was a stock that needed to be bought every time it dipped below $120 and then sold every time it got to the high $120s," he said.

However, earlier in the month that changed. Chevron broke out of that range, trading higher than $130.

And it's not just Chevron that's behaving this way.

RonTech2000 | E+ | Getty Images

Something very similar happened with PPG, Cramer said. "For eight months PPG dallied in the $180 to $190 area. Then about three weeks ago it broke out of that range and hasn't looked back since."

Cramer believes it's a very good sign.

That's because investors who closely follow chart patterns cheer when they see a stock pierce a level that had generated strong resistance. They call it a breakout and consider the resulting pattern a very bullish signal.

"In turn, they buy," Cramer said.

That's true, even if the stock is trading at a 52-weeks high or an all-time high; investors who follow technicals become so-called "buyers of the breakout."

And given the incremental improvements in the economy; a survey found the U.S. services sector in June expanded at its fastest clip in more than four years, Cramer wouldn't be surprised if other stocks that had been range bound, also begin to break out. In fact, he believes the phenomenon is about to happen imminently in both aerospace and the .

In both sectors Cramer said, "There are many stocks that have spent a lot of time in the wilderness," meaning they've been range bound. However, as the economy kicks into gear, Cramer added, "I think they blast off" or breakout.

Read more from Mad Money with Jim Cramer
Mutual funds hiding something from you
Cramer: On being young and getting rich
401(k) or IRA: Cramer's rule to remember

And as they break above levels of former resistance, Cramer thinks they, too, will attract new buyers, just like Chevron and PPG did earlier in the month.

Therefore if you're looking to put money to work in the second half, "I think aerospace and financials will be among the best places to find new ideas," Cramer said.

Editor's note: Cramer's comments on Chevron aired Fri., June 20.

Call Cramer: 1-800-743-CNBC

Questions for Cramer?

Questions, comments, suggestions for the "Mad Money" website?