We’re selling 25 shares of Microsoft at roughly $431.42 each. Following Monday’s trade, Jim Cramer’s Charitable Trust will own 235 shares of MSFT, decreasing its weighting to roughly 2.85% from 3.12%. Wall Street just wrapped up its best month of 2024 with the S & P 500 gaining 5.7% in November. As a result of the rally, heading into the seasonably strong month of December, the market has become overbought, according to the S & P 500 Short-Range Oscillator . The Oscillator, which tracks trading momentum, climbed to plus 5.5.% after Friday’s session Reading the Oscillator A reading above plus 4% indicates an overbought market that could be due for a rest or consolidation. Anything below minus 4% indicates an oversold market that could be positioned for a tactical bounce. When the stock market goes on a run like this and pushes into overbought territory, our discipline kicks in and we trim positions that have moved up. We’re only taking profits in Microsoft here, but we’ll make more small sales out of discipline should the Oscillator become even more overbought in the coming sessions. Microsoft has had an OK move since we bought 50 shares at roughly $398 in early August. The stock has gained about 8% but trailed the S & P 500 after the market broadened out to larger beneficiaries of the upcoming administration of President-elect Donald Trump like financials and industrials. Other software players like Club named Salesforce have made bigger moves too on the idea that Microsoft has given up some ground in its artificial intelligence leadership. The market has shifted its attention to so-called AI agents from Copilots, which Microsoft got an early jump on due to its backing of ChatGPT creator OpenAI. Salesforce, which reports earnings after the closing bell Tuesday, has been getting traction with its Agentforce toolset. Microsoft responded recently by releasing its own AI agent capabilities. MSFT YTD mountain Microsoft YTD We are not making any changes to our positive long-term view of Microsoft. However, we’re downgrading the stock to our 2 rating and making a small trim until we start to see the company generate a better return on investment on its aggressive AI spending. We will book a gain of roughly 56% on shares purchased in May 2022. (Jim Cramer’s Charitable Trust is long MSFT, CRM. 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.
We are respecting an overbought market to trim an AI leader facing competition