We're adding to high-quality tech in a market at extreme mid-June oversold conditions

Published Mon, Sep 26 20229:05 AM EDT

We're buying 75 shares of Amazon (AMZN) at roughly $113.93 each. Following Monday's trade, Jim Cramer's Charitable Trust will own 750 shares of AMZN, increasing its weighting in the portfolio to 3.16% from 2.85%. Monday's Amazon add follows last week's selloff, which brought the S & P Oscillator to an extreme oversold reading. The S & P Oscillator is a technical indicator that has guided us through oversold and overbought conditions in the market countless times over the years. After Friday's market decline, the Oscillator moved even deeper into oversold territory with a reading of minus 10.66%. As a reminder, any time the Oscillator moves below minus 4%, it signals oversold conditions in the market, which could mean it's due for a bounce. The S & P Oscillator does not break 10% too often, but this is not the first time this year it's happened. In fact, the last time the S & P Oscillator was this low was minus 10.51% on June 16. That day turned out to be a pretty good time to buy stocks (and not sell) at least from a trading perspective, as the market was about 5% higher one month later and about 17% higher two months later. To be clear, we aren't making the same prediction because as we all know too well, the Oscillator can still get more oversold from here and there could be more pain in the market ahead. We only bring this up to show an example of how it can be more profitable (at least in the short term) to be opportunistic and look for bargains of profitable, high-quality companies after a nasty decline like what we've experienced. That brought us to Amazon on Monday morning. We're repurchasing more of the shares we sold at higher prices in early March and early April . Shares of the e-commerce and cloud computing giant have dropped about 13% since our last purchase in late August . If you are going to buy shares of any tech company right now, you have to respect how they have become falling knives in this rising interest rate environment. When you have a stock of a quality company that has become a falling knife, you have to be patient and buy with what we call wide scales, meaning increments of about 10%. (Jim Cramer's Charitable Trust is long AM