On Tuesday's episode of Mad Money, Cramer and Lang started by looking at Costco (COST) , which reports its latest results later this week. Costco has been consolidating its recent gains, holding above both its 200- and-50 day moving averages. Despite the volatility of the last month, Lang points out that Costco's volume tends to rise on up sessions, a bullish sign because volume indicates whether a move is lying or speaking the truth, and the strong volume on up days means that the strength in Costco is honest.
Meanwhile, the Relative Strength Index, or RSI, an important momentum indicator, has been trending steadily higher, but remains far from overbought territory. Costco's soon likely to break out of a wedge pattern, and if it breaks out to the upside, as Lang expects, the stock could move quickly to $200. Lang's noticed some bullish options activity in the April $190 calls and higher, another sign that Wall Street has gotten pretty positive on this name.
In the case of Nordstrom (JWN - Get Report) , which just turned down an $8.4 billion bid from the Nordstrom family to take the company private, Lang likes the action. The rebound on Friday indicates that big institutional buyers bought the selloff at the open. When investors are eager to buy the dips, that's a good sign. If there's follow-through, Lang says these reversals can mark huge turns for a stock. He also points out that volume levels have swelled of late, and lots of investors were buying March 52.5 call options, clearly looking for Nordstrom's stock to move much higher in the days ahead. Lang notes that the Moving Average Convergence Divergence, or MACD indicator, just flashed a bullish crossover, where the black line crosses above the red line. This is one of the most reliably bullish signals around. Lang thinks the stock won't have much trouble climbing above $57 over the coming weeks.
Macy's (M - Get Report) surged after it reported a strong quarter last week. The Chaikin Money Flow oscillator, which measures the level of buying and selling pressure, has turned positive again -- meaning institutional investors are giving Macy's their blessing. For Lang, this chart tells a story of institutional investors coming back on board with Macy's. Right now it's a $30 stock; he sees it moving toward $35 over the course of the spring.
Last of all, Cramer and Lang looked at TJX (TJX - Get Report) , the parent of TJ Maxx, Marshalls and Home Goods. Lang says TJX has the best chart of them all. After reporting a surprise blowout quarter last week, the stock spiked on Wednesday even as the averages fell sharply. The stocks remained higher on Thursday, despite the fact that the averages got hammered yet again. When a stock is up on a big down day, it suggests the underlying company is doing something very right.
Lang thinks this move might just be getting started. The MACD indicator just flashed a buy signal last week. While the Relative Strength Index is at overbought levels, Lang says this might be one of those stories that stays overbought because it's attracting so much positive attention after being down in the dumps for quite some time. Lang sees it going from the mid-$80s to the $90s by this summer, and then on to the $100 mark.
What about the big blowup today from Target, which sent the stock plunging 4.5%? Looking at the chart, Lang points out that it's now selling off on high turnover, a classic bearish sign. The MACD indicator has rolled over to a sell signal, and Lang could see Target tumbling from here at $71 down to $60, where it might find support at its 60-day moving average.
Cramer and the AAP team say that the Nordstrom (JWN - Get Report) family's $50 offer is the just the floor of negotiations. Find out what they're telling their investment club members and get in on the conversation with a free trial subscription to Action Alerts PLUS.
On Real Money, Cramer says if we didn't have something to worry about, we'd just invent it. Get more of his insights with a free trial subscription to Real Money.
Search Jim Cramer's "Mad Money" trading recommendations using our exclusive "Mad Money" Stock Screener.
To read a full recap of this episode of "Mad Money," click here.
To watch replays of Cramer's video segments, visit the Mad Money page on CNBC.
To sign up for Jim Cramer's free Booyah! newsletter with all of his latest articles and videos please click here.