Cramer's Year-End Game Plan: Load Up On Digital Retailers
Consumers will spend the final few weeks of 2020 doing much of the same they always do: shopping for holiday gifts. As such, investors may want to consider "loading up" on retail stocks — so long as they have a strong digital presence, according to Jim Cramer.
The Strategy: Legendary chart pro and technical analyst Larry Williams presented his "Fourth of July trade" in June that "worked out" well and his latest Thanksgiving trade strategy for the rest of 2020 could also prove to be a winner, Cramer said Monday on "Mad Money."
Williams is modeling for a "month-long retail rally" starting in Thanksgiving through Christmas, Cramer said. But investors need to be selective in their stock picking as the holiday shopping season will be "dominated by online retail."
Amazon: Amazon.com, Inc. (NASDAQ:AMZN) historically slumps from September through late November and this year is no different. Amazon's stock was trading near $3,500 to start September and opened Tuesday at around $3,100. However, the stock has shown an ability to gather momentum during this period.
"So you got to imagine what happens when this pattern turns positive later in the week — I think it will be pretty amazing," Cramer said.
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Walmart: Walmart Inc (NYSE:WMT) has made a "fortune" during the COVID-19 pandemic because it gets to "stay open no matter what," Cramer said. Fortunately, the company was prepared for a rush of new digital orders after spending billions of dollars over the years in its omnichannel capabilities.
Apple: While technically not a retailer in the pure sense, Apple Inc. (NASDAQ:AAPL) not only "moves a ton of its own merchandise" online but has a large presence in other digital services like music subscription and the App Store.
At a time when consumers can't spend money on traveling and experiences, people are left at home with extra money to spend on "stuff."
"And Apple makes some of the best stuff in the universe," Cramer said.
Home Depot: Home Depot Inc (NYSE:HD) benefited throughout the pandemic as people chose to spend more money on upgrading or renovating their homes, Cramer said.
"When millions of people are stuck at home, they have every reason to renovate," Cramer said.
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