We're using a recent decline to buy more of this entertainment stock in an oversold market

Published Tue, Dec 20 20229:07 AM ESTUpdated Tue, Dec 20 202210:44 AM EST

After the opening bell, we'll be buying 75 shares of Disney (DIS) at roughly $85.73 each. Following Tuesday's trade, Jim Cramer's Charitable Trust will own 1,275 shares of DIS, increasing its weighting in the portfolio to 4% from 3.78%. We are putting some money to work Tuesday morning, consistent with our discipline of buying in small increments when the market is oversold, according to the S & P Oscillator. 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 Monday's broader market decline — the fourth straight down session for the S & P 500 — the Oscillator continued to trend in oversold territory with a reading of minus 4.58%. 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. Of course, the Oscillator could become more oversold from here and the market could continue to drop. There have been several instances this year when we have seen the Oscillator reach more extreme oversold levels. However, we believe the risk-reward ratio on stocks of high-quality companies improves as prices move lower. At a minimum, we think the oversold Oscillator serves as a reminder that stocks have been hit hard in a very short period and we should start thinking more opportunistically. Furthermore, we don't want to rule out the possibility of a Santa Claus rally just yet. The way December has gone this year, it certainly feels like a year-end rally is out of the picture, but the charts as interpreted by Larry Williams and explained on Monday evening's "Mad Money," suggest one is still in the cards. The charts suggest the optimal buying point could come this Thursday, but we are willing to put some money to work ahead of that because of the difficulty of pinning down a precise buy day. The stock we are picking up Tuesday morning is Disney . Shares were battered Monday after the box office sales of the new blockbuster film "Avatar: The Way of the Water" fell short of projections. We thought the nearly 4.8% selloff in Disney stock was excessive. Now trading in the mid-$80s, Disney shares are roughly $5- to $6-per-share lower than where it traded before the CEO switch . Bob Iger will have his work cut out for him, but we see him as the steady hand Disney needs to right the wrongs made under Bob Chapek and guide the company through the cord-cutting headwinds in the media division and position the streaming business toward profitable growth. (Jim Cramer's Charitable Trust is long DIS. 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.

Jim Cramer at the NYSE, June 30, 2022.

Virginia Sherwood | CNBC