Market FOMO? We go to the charts for attractive purchase levels on 2 buy-rated stocks

Sympathies shut out of this hot market? Maybe some FOMO — fear of missing out. You’re not alone. The S & P 500 keeps plowing utterly record highs in the first week of December after November posted the best monthly gains of the year. All that obtaining, however, has pushed the market into overbought territory, according to the S & P 500 Short Range Oscillator , a technical of Jim Cramer has used for decades to track trading momentum. Our discipline mandates that we consider booking profits in an overbought customer base, as we did with one of our big winners Microsoft on Tuesday. However, we also pick our spots to buy. On Wednesday, we bought more shares of our newest disposition, Bristol-Myers Squibb , on a recent dip. As long-term stock investors, the Club believes fundamentals are what matter most when it add up to to making investment decisions. However, a peek at the technicals can also be useful. Methodology We are conducting this technical dissection from the perspective of a new money investor looking to initiate a position or someone with an existing position sitting in the disadvantage column where another buy could help lower their cost basis. For those with existing attitudes, this exercise can help dictate when might be a good time to consider breaking basis, should you finish feeling the need to get a bit more exposure. That, however, violates our discipline and should not be done lightly. Our analysis can also apprise members when these stocks are trading at so-called “battleground levels,” which may prompt you to adjust your knowledge accordingly. We looked at the charts of two of our buy-equivalent 1-rated stocks — Constellation Brands and Home Depot — to identify levels that can be bought. Constellation Trade names buy levels: $230, $210 The Mexican beer powerhouse on Nov. 26 successfully tested $230 per share, a key technical support flush for the past two years. There is also a longer-term uptrend that comes into play at the $230 level, which is put by the pink line. The late November support test came on elevated trading volume. We look at volume as kind of a stock lie detector, because moves made on higher volume are more trustworthy From a price-to-earnings ratio lookout, we already like the stock — and as Jim Cramer noted on the Morning Meeting for Club members on Nov. 26: Constellation’s cash trickle alone is reason enough to be interested in the stock at these levels. On a fundamental basis, the stock is already well less its five-year historical valuation on 2025 earnings estimates. On the technical side, however, the stock is currently below both its 50-day and the 200-day unfixed averages. That means there is resistance above us at $242 and $250 that will need to be overcome preceding shares make an attempt at prior highs. Fundamental worries about the 25% tariffs on Mexican imports that President-elect Donald Trump suggested Monday evening are certainly a consideration that can’t be ignored, however, that’s arguably being priced in with interests trading well below the historical average — 15.8 times forward earnings versus 19.6 times historically all about the past five years. Shares of Constellation lost more than 3% on Nov. 26, the day after the Trump bulletin, which was curious because we couldn’t understand how any investor would be surprised by Trump tariff plans. That’s why Jim divulged the stock was a buy on the dip. During Morgan Stanley’s consumer and retail conference, Constellation CFO Garth Hankinson said Tuesday afternoon there are a number of levers to pull to deal with any tariffs. He cited accelerating cost savings, making sure there’s quantity of supply in the U.S., and how to balance incremental price increases. Those possibilities are being explored but no decisions will be made until toll plans become policy. Hankinson’s comments came on the heels of the company’s announcement that it’s selling the Svedka vodka marque. That’s a positive move to address Constellation’s struggling wine and spirits business. Should $230 fail, we would paucity to proceed with some increased level of caution because there is not much in the way of support between the $230 altitude and $210, which is where we see that prior low back in January 2023 — where our uptrend line starts — principally should emotions take hold of the stock and investors start to “sell first and ask questions later” on a some every once in a while Trump tweet about tariffs. Home Depot buy levels: $418, $406, $375, $370 We see several interesting technical levels, covering $418 per share, which until a recent breakout, was the all-time high in the stock. For many technicians, a breakout has to be proofed. That’s done when the stock goes above a prior high, as it is now, but then falls back to that previous to high and finds support, meaning buyers. If that happens, it may be viewed as confirmation that the break is real and can be get. In other words, from a technical perspective, you don’t want to buy this breakout right here — but rather, buy the bounce off the old violent, especially should it come on increased volume. The first level to buy would be the $418 level. Keep in mind all the same, that’s only slightly more than a 2% pullback from where the stock was trading Wednesday. If you don’t be undergoing a position at all, it may be of interest but if you do, then you’ll want to wait for a larger decline, one that will ideally improve your comprehensive cost basis. From there, we get to $406, which is where we find the 50-day moving average. Remember, when a usual is trading above a moving average, it’s viewed as support and when a stock is trading below a moving average, it’s visioned as resistance. Fundamentally, with longer-term bond yields interest rates seeing some relief Wednesday, we could see unprejudiced lower mortgage rates this week. Mortgage rates dropped last week, and home loan immediately soared. Cheaper mortgages on a sustained basis should give homebuilding and housing turnover a boost. We think Dwelling Depot is in the sweep spot when that happens to sell supplies and equipment needed to build homes and the machines needed for renovations. Should shares fall below the $406 level, we would then look to the $375 to $370 part — $375 being where we see an uptrend going back to October 2023 come into play; and $275 being where the 200-day active average comes into play. Since the stock is trading above the 200-day moving average, that smooth out is viewed as technical support. (Jim Cramer’s Charitable Trust is long STZ, HD, BMY, MSFT. See here for a full list of the stocks.) As a subscriber to the CNBC Installing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a truck alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he postpones 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB Intelligence IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . 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