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Newell Rubbermaid Rises Modestly

Cramer has been watching this stock for an up move. Find out what strategy he's setting in motion now.
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Dear Action Alerts PLUS Subscriber,

It's time to shift gears with Newell Rubbermaid (NWL) . By now, most of you readers ware familiar with my method of buying a stock when it breaks down. But it only works if you can sell the position when it moves 10% off the bottom.

We bought a lot of Newell around $21, so the prudent move here at $23.29 is to sell 1,500 of my 15,500 shares.

You see, Newell very easily could head back to $21. But I won't have room to buy more shares if I don't take some profits off the table when we catch a rally like this.

This might seem confusing, especially for you new readers, because I don't view Newell as being overpriced by any means. Understand, this sale does not represent a change in my sentiment toward the stock.

This is my method for trading around distressed stocks. I've used it for years.

It fails me only when I abandon it, like with Commerce Bancorp (CBH) and Dick's Sporting Goods (DKS) .

Regards,

James J. Cramer

DISCLOSURE: At the time of publication, Cramer was long Newell Rubbermaid.