With the holidays in full swing already, Jim Cramer thought this would be a good time to focus on the best ways for investors to play the holidays in their portfolio. And, for anyone who has young children, that could involve a toy made by Mattel or Hasbro.
Maybe even both, for those who want to keep their kid in a good mood.
For the past few years, if anyone asked Cramer how to play the toy space, he would have said to buy Hasbro. It has the best licensing deals and movie associations, including many partnerships with Disney. Mattel was known as a much more old-school play, selling things like Barbie, Fisher Price toys and Matchbox cars.
“Mattel does have some ‘Star Wars’ style Hot Wheels, but Hasbro has got virtually everything else from that franchise,” the “Mad Money” host said.
But, lately, it seems that the two toy stocks have reversed trajectories dramatically, with Mattel roaring higher and Hasbro falling dramatically.
So can the trend continue?
To find out, Cramer turned to Tim Collins, a technician and colleague of Cramer’s at RealMoney.com. When Collins consulted the charts for the future of these two toy companies, he discovered that the new pattern is poised to continue with Mattel leading the way.
Looking at its daily chart, Collins found that Mattel has steadily worked its way higher in a tight bullish channel. In fact, the stock has been so strong that it has created a whole new uptrend above its long-term ceiling of resistance at $25.
Collins added that Mattel is pretty much showing all of the short-term bullish flags possible right now, and he could see the stock going to $30 soon, which would be a quick 10 percent gain.
As for Hasbro, its daily chart revealed that it has been stuck in a nasty downtrend. Last week it broke down below its long-term floor of support at $70. It stock has moved into extreme oversold territory on both the Commodity Channel Index and the Relative Strength Index.
This action prompted Collins to think that Hasbro could be ready for a small relief rally, which has happened in the past few days. However, that could be short lived as Collins does not see the stock rebounding much past $70.
Ultimately, the charts indicated to Collins that Mattel’s stock was the winner of the toy wars this holiday season, while Hasbro is likely to give up its gains.