We're buying the recent drop in a recession-resistant stock that started the year hot

CNBC Finance

3 min read

We're buying 25 shares of Procter & Gamble at roughly $152. Following Wednesday's trade, Jim Cramer's Charitable Trust will own 450 shares of PG, increasing its weighting to about 1.8% from 1.65%. After sitting on our hands Tuesday and awaiting further developments in the Iran war and its potential impact on global energy markets, we are putting some money to work for two reasons. First is the release of 400 million barrels of oil by the International Energy Agency. While this historic measure is far from a long-term solution, it should give the crude market some time to stabilize, unless there is a significant escalation of attacks on oil infrastructure. Second is the S & P Short Range Oscillator is finally oversold. It's gotten close over the past few days, but Tuesday's decline finally pushed this technical momentum indicator below minus-4%, which is the threshold for an oversold market. It's the first time that's happened since April 2025. We look to buy stocks when the Oscillator is oversold because it often signals excessive selling pressure and overly negative sentiment in the market. PG YTD mountain Procter & Gamble YTD We're buying more Procter & Gamble on Wednesday because the stock has seen sentiment drastically change over the past month. At the start of the year, investors were piling into consumer staples while rotating out of technology stocks and the Magnificent Seven megacaps. They didn't want stocks tied to the artificial intelligence cycle, preferring dependable cash flows and solid dividend payers. We were quick to point out that there was too much enthusiasm for the slow-growing staples, which is why we went against that rotation by selling 50 shares of P & G in the low $160s on Feb. 12, when it was up about 13% year to date. Since the outbreak of the Iran war, consumer staples have been hammered on concerns that higher prices at the gas pump will limit how much consumers can spend on goods. P & G shares have dropped about 9% since the start of March, bringing the stock about $10 below where we sold it last. With sentiment finally normalized, we're upgrading the stock back to our 1 rating â treating this pullback as an opportunity to repurchase half of what we sold last month, leaving room to scoop up the rest if the stock drops further. Procter & Gamble is the consumer brand powerhouse behind such household names as Tide laundry detergent and Crest toothpaste. In these uncertain times, it helps that consumer staples, like P & G, tend to be recession-resistant because people need to wash their clothes and brush their teeth no matter the economic ups and downs. (Jim Cramer's Charitable Trust is long PG. 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.

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We're buying the recent drop in a recession-resistant stock that started the year hot

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