This earnings season has been peppered with stock declines that CNBC's Jim Cramer chalks up to small blips in companies' reports that make investors feel like they've lost momentum.
"That's why Caterpillar got clobbered — [management] described the past quarter as the high-water mark, even as the company raised its full-year earnings guidance by a couple of bucks," the "Mad Money" host said on Tuesday.
In each case, investors and analysts panicked that the industrial giants had delivered their "last good quarter[s]," Cramer said.
So, to see if the pullbacks in shares of Caterpillar, Boeing and United Technologies were justified, Cramer called on technician Bob Lang, the founder of ExplosiveOptions.net and one of the brains behind TheStreet.com's Trifecta Stocks newsletter.
"Lang believes the selling in these three former market darlings was premature, to say the least," Cramer said. "In his view, it's merely given you yet another fabulous buying opportunity. [...] Why does he like it? Because the numbers look good and the technicals look even better."
Cramer began with the daily chart of Caterpillar, a global construction equipment manufacturer.
While its first-quarter results topped analysts' expectations, Cramer argued that the "high-water mark" comment tainted the whole report, sparking a flurry of selling in Caterpillar's stock.
Following the post-earnings decline, Lang noticed that Caterpillar's stock was stuck in a trading range between $139 and $152 a share. However, if the stock could break above the $152 level, its prospects would improve, the technician said.
Lang also that the moving average convergence divergence indicator, a tool that identifies changes in a stock's trajectory before they happen, made a bullish crossover on Monday.
"This tends to be a very reliable indicator," Cramer said. "Put it all together and Lang believes that Caterpillar can rally $3 bucks from here, [break] out over its $152 ceiling of resistance and then coast to the $160s."
Next, Cramer and Lang looked at the daily chart of aircraft manufacturer Boeing. Shares of the aerospace play were rallying until trade war worries began to surface in the stock market. Then, when Boeing issued its latest earnings report, shares took another hit.
"According to Lang, Boeing is just consolidating here," Cramer explained, reminding investors that Boeing's stock has outperformed the broader defense and aerospace sector.
On top of that, shares of Boeing have been bouncing back on high volume, a good sign for Lang, Cramer said. For technicians, volume is like a polygraph test — a move that happens on high volume is telling the truth; a move that occurs on low volume is not as trustworthy.
"Right now, Boeing sits at $338," Cramer said. "If the stock can break out above $345, up a little more than 2 percent from here, then Lang thinks it could head straight back to its old highs of $370 and beyond."
Shares of United Technologies have also been under pressure because of trade war fears, Cramer said, turning to the industrial conglomerate's daily chart.
"In [Lang's] view, United Technologies is the baby that got thrown out with the industrial bathwater," Cramer said. "When the stock broke down last week, it did fall below its 200-day [moving average], [...] and from Lang's perspective, that's a meaningful negative."
Still, deep-pocketed investors bought into the stock at $117 to $120 a share, building what Lang saw as a floor of support. That, paired with a positive turn in the relative strength indicator, a key measure of momentum, made him more confident about the fate of United Technologies' stock.
"He believes that this stock could be a real winner if it just busts through the ceiling of resistance at $126," Cramer explained. "As long as United Technologies is here in the low $120s, Lang is staying on the sidelines, but he would get very bullish on a breakout."
"Bottom line? If you think the market's overreacting when it punished Caterpillar, Boeing and United Technologies after they reported ostensibly good quarters, then I've gotta say, the charts, as interpreted by Bob Lang, agree with you," Cramer said. "He's bullish on CAT and Boeing right here and would go positive on United Technologies if it can rally just a couple of bucks from where it's currently trading."