Charts suggest infrastructure winners like Nucor may go higher

Investors may still have opportunities to buy stocks that benefit from the potential passage of a $ 1 trillion infrastructure package, CNBC’s Jim Cramer said Monday, highlighting the technical analysis offered by the founder of ExplosiveOptions.net, Bob Lang.

“Even though infrastructure stocks have already raced, the charts – as interpreted by Bob Lang – suggest that many of them could have a lot more benefit here, especially Martin Marietta, Union Pacific, Nucor and American. Tower. I think he has a really good point, “said the host of” Mad Money “.

Biparty infrastructure legislation was passed by the US Senate last week, sending the proposal to improve the country’s roads and bridges, among other initiatives, to the House of Representatives. It has to go through the Democratic-controlled House before President Joe Biden can sign it.

While shares of Martin Marietta have risen by more than 34% since the start of the year, Cramer said Lang’s analysis suggests the supplier’s inventory of concrete and asphalt may not increase.

In addition to a “solid pattern” of higher lows and higher highs, Cramer said that an institutional buy and sell indicator known as Chaikin Money Flow shows favorable trends in recent months.

Conversely, the title seems overbought.

“Sometimes, however, overbought stocks just stay overbought when they’re really good,” Cramer said. “Is it possible here?” Lang likes that Martin Marietta has rallied to a large volume. “

“Although you might want to let the stock cool down in the short term, and you can still do it,” Cramer said. Lang believes the stock, which closed Monday’s session at $ 380.83, could potentially reach $ 500.

The Nebraska-based Union Pacific Railway has “been negotiating in a box” since March, Cramer said. However, the company’s shares have risen more than 3% in the past five days.

“Volume trends have been bullish. This means the stock tends to pick up at high volume. Remember volume is like a polygraph – it lets you know whether or not a move is telling the truth. “said Cramer.

Additionally, Cramer added, the Moving Average Convergence Divergence momentum indicator recently gave a buy signal for Union Pacific, which could benefit from the proposed infrastructure package investments in rail and port upgrades.

“Lang thinks you could have a good support floor down around $ 7 from here,” Cramer said, noting that the stock was able to maintain its 50-day moving average. “If Union Pacific can break out of its box model by closing above $ 229, it expects the stock to climb to $ 250 in the not-so-distant future.”

Shares of steelmaker Nucor have risen more than 130% year-to-date, but Cramer said Lang believes the stock is in a situation “where a formidable high volume rally is attracting more and more money. ‘buyers’.

“It’s currently a $ 122 stock, but Lang could see it go to $ 150, then maybe $ 175. Wow. I think he’s right – a fab time for Nucor,” he said. Cramer said. “They were doing very well even when this set of infrastructure looked like it was dead in the water, so imagine how well they’ll be doing if that passes.”

American Tower, a real estate investment trust that provides wireless communications infrastructure, is well positioned to benefit from the broadband Internet investments included in the bipartisan proposal, Cramer said.

Lang thinks volume trends in American Tower look strong, Cramer said, and he doesn’t look overbought by the Relative Strength Index.

“At $ 283, this stock is six dollars off a new high. If it can gain some momentum, Lang thinks it can hit $ 330 in the relatively near future, then $ 350,” Cramer said. .