We're trimming this oil stock to raise some cash in this overbought market

Published Tue, Aug 9 202210:57 AM EDT

We're selling 45 shares of Chevron (CVX) at roughly $156.65 each. Following Tuesday's trade, Jim Cramer's Charitable Trust will own 100 shares of CVX, decreasing its weighting in the portfolio to 0.53% from 0.76%. Consistent with our prior commentary, we are booking additional profits as energy prices move higher — with WTI reclaiming the $90 level — on a down day for the major averages. We liked what management had to say on the most recent earnings conference call, especially in regard to increasing the high end of their annual share repurchase range to $15 billion from $10 billion previously, thanks to the company's robust cash flow generation. We also appreciate management's intention to run at that high end rate in the third (current) quarter. But we want to ensure that we do not let greed get the best of us. We regretted not taking advantage of the previous run up, before the energy complex pulled back significantly, and promised ourselves not to make that mistake again. As Club members will recall, we have viewed our energy exposure as a hedge for the rest of our portfolio, which is much more at risk of inflation. In some cases, that's because energy represents an input cost and higher prices pressure profit margins. In other cases, it represents competition for discretionary dollars as consumers need to prioritize filling their gas tanks over other purchases. With tech stocks starting to give up their recent gains, and the market overall remaining in overbought territory as indicated by the S & P Short Range Oscillator, this move allows us to reduce the hedge and increase our cash in preparation of more attractive buys elsewhere. We spoke more to our thinking on oil on Tuesday's "Morning Meeting." (Jim Cramer's Charitable Trust is long CVX. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

An oil pumpjack in Los Angeles, California.

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