We're adding to a recession-resistant stock but saying wait on some troubled tech

Published Mon, Oct 10 202212:02 PM EDT

We're buying 20 more shares of Constellation Brands (STZ) at roughly $221.19 each. Following Monday's trade, the portfolio will own 390 shares of STZ, increasing its weighting to 3.24% from 3.08%. Our small add of Mexican beer powerhouse Constellation Brands into Monday's declines makes good on last week's desire to buy the post-earnings selloff in STZ. We could not buy the stock last week as we were restricted from trading it because Jim mentioned it on television. Importantly, we're keeping this purchase on the smaller side because the market is not yet oversold according to the S & P Oscillator, which was only at minus 3.28% after Friday's selloff. A reading below minus 4% means the market is showing oversold conditions. Unless we start to see some type of cooling in inflation data, we'll only look to get more opportunistic about the market as it becomes more and more oversold. The September reads on producer prices and consumers prices are out on Wednesday and Thursday, respectively. We also want to reiterate our thoughts around the vicious decline in the semiconductors, which Jim spoke about at length during Monday's "Morning Meeting." Check out the video if you have not watched it already. This is a group to be careful about in the near term, and it would not surprise us to see these stocks fall even further from here given the magnitude of the shortfall in Advanced Micro Devices ' (AMD) preannouncement. We caution against those looking to buy into the weakness because one of our investment disciplines is never to buy a company's stock after a preannouncement at least until after you see the full earnings report and listen to management's conference call. AMD is expected to report its full third-quarter results on Nov. 1 after the closing bell. A preannouncement of that size usually means the business will get worse before it gets better, and without hearing the full context of what went wrong, how can one appropriately assess when things will get better? We'll follow up later Monday with more thoughts on the semis. But for now, we wanted to reiterate that this is a group we have no plans of buying into today's weakness. (Jim Cramer's Charitable Trust is long STZ, AMD, NVDA, MRVL and QCOM. 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.

Traders work on the floor of the New York Stock Exchange (NYSE) on August 5, 2022 at Wall Street in New York City.

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