Cramer: Get Ready For a Tech Rally

[HenryTo]

Sorry, I don't agree with Cramer's take on INFY nor on WIT. I think the recent bullish trend of outsourcing is done for now - similar to what I've been saying during the last couple of months. I also don't think AAPL can last very long at these prices - i.e. I believe tech will continue to go down.
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Cramer's 'Mad Money': Get Ready For a Tech Rally
By TSC Staff
6/24/2005 7:29 PM EDT
URL: http://www.thestreet.com/funds/smarter_up/10229466.html

Updated from 7:05 p.m. EDT

Technology shares are poised to rally while oil and health care stocks are probably "done going down" after a two-day rally that lopped 2.7% off the Dow, Jim Cramer said on CNBC's "Mad Money" Friday night. Cramer warned against energy-reliant cyclical companies.

"The last two days, technology did better than cyclicals. That will be the pattern from here," Cramer said. "I switched my plan this week. I'm tired of making money in retail. It's time to take that money and put it in technology."

Cramer said too much optimism brought down the market this week as psychology got ahead of fundamentals.

"The market is getting killed because there's too many bulls. When everyone's so bullish, there's nobody left to convert," he said. "Everyone who wants to be in, is already in. The shorts were forced to cover earlier. They can't be the safety net that they could be earlier."

Still, the action in some sectors is better than others.

"We started seeing at the end of the week that companies that don't use a lot of oil were bottoming while companies that do [kept falling] ."

To harvest the coming upside, Cramer told viewers to "stop whining" about IT outsourcing and consider buying companies that can sell technology services cheaply, particularly ones based in India.

The business model works in a global economy because "wherever there are phone lines, you can outsource brainpower." Cramer prefers India to China because its information services infrastructure is already mature and the country doesn't have as many political headaches.

Cramer highlighted three names in the space, Cognizant (CTSH:Nasdaq) , Wipro (WIT:NYSE) and Infosys (INFY:Nasdaq) .

"Infosys is the pure play and it's the one I would run with," he said. He noted management problems have left Wipro cheapest on a price-to-earnings basis because of management trouble, and said Cognizant might be too levered to the financial sector.

"Infosys is cheaper. I still think Cognizant is going up, I just think Infosys is going up more," Cramer said. "That said, I'd buy either hand-over-fist on any kind of major pullback."

In pharmaceuticals, Cramer highlighted Genentech (DNA:NYSE) and Sanofi (SNY:NYSE ADR) as possible beneficiaries of new research showing chemotherapy is more effective in non-small cell lung cancer patients than previously believed.

While neither have obvious revenue streams in chemo, both have cancer candidates (Taxotere at Sanofi and Tarceva and Avastin at Genentech) that could see increased referrals in the event of more chemo treatments.

"When it comes to cancer, these drugs act like good little socialists. It's all about cooperation." Cramer said he'd "back up the truck" on Genentech.

Cramer was bearish on drug companies Alkermes (ALKS:Nasdaq) and Cephalon (CEPH:Nasdaq) , which recently signed a deal to market an anti-alcoholism treatment.

In the lightning round, Cramer was upbeat about Allstate (ALL:NYSE) , Medarex (MEDX:Nasdaq) , Kellwood (KWD:NYSE) , Sunrise Senior (SRZ:NYSE) , Boeing (BA:NYSE) , BE Aerospace (BEAV:Nasdaq) , Sonic (SONC:Nasdaq) , McGraw-Hill (MHP:NYSE) , McDonald's (MCD:NYSE) , Kaneb Pipeline (KPP:NYSE) , Whirlpool (WHP:NYSE) , Procter & Gamble (PG:NYSE) and ITT Industries (ITT:NYSE) .

He recommended selling Shanda (SNDA:Nasdaq) , Diebold (DBD:NYSE) , Salesforce (CRM:NYSE) , Nextel (NXTL:Nasdaq) , Amedisys (AMED:Nasdaq) , Red Robin (RRGB:Nasdaq) , Rockwell Collins (COL:NYSE) , Corn Products (CPO:NYSE) , Maytag (MYG:NYSE) , Ceradyne (CRDN:Nasdaq) , Able Labs (ABRX:Nasdaq) and Netflix (NFLX:Nasdaq) .


June 23 'Mad Money'

On CNBC's "Mad Money" Thursday, Jim Cramer said the market had a "first-class panic" Thursday, featuring a 166-plus point decline in the Dow Jones Industrial Average. "The market is throwing a sale and it's not discriminating between what needs oil lower and what doesn't," he said in the opening monologue. "Let's discriminate and get ready to do some buying."

In a Cramer-esque version of the paired trade, the television host laid out a number of stocks that "aren't working" and should be sold and recommended corresponding names that should be bought instead.

Cramer said the market "wants out" of stocks such as Tyco (TYC:NYSE) -- "which needs [fast] GDP growth we may not have anymore" -- and wants into UnitedHealth (UNH:NYSE) , which helps keep health care costs down.

"People should swap out of AMR (AMR:NYSE) and go into Halliburton (HAL:NYSE) ," he said.

"Get out of Ford (F:NYSE) and into Genentech (DNA:NYSE) ," he said, calling Ford above $10 "a gift."

"Sell Yellow Roadway (YELL:Nasdaq) -- it isn't coming back -- and buy Motorola (MOT:NYSE) ."

"Sell Southwest Airlines (LUV:NYSE) and buy Gillette (G:NYSE) ."

"Sell CSX (CSX:NYSE) and buy General Mills (GIS:NYSE) ."

"Sell Dow Chemical (DOW:NYSE) and buy Walgreen's (WAG:NYSE) ."

"Get out of DuPont (DD:NYSE) and into Bristol-Myers (BMY:NYSE) ."

"Bottom line -- people will sell tomorrow," Cramer predicted. "I need you to use the weakness that comes across the board and load 'em up if they're not sensitive to the economy or are in tech."

Cramer reiterated his bullish call on tech, calling it a "six-month call" vs. a daily call. "The market wants you in Microsoft (MSFT:Nasdaq) , which sells at 19 times earnings," he said. "If it does go down, it's a gift."

Later in the show, he observed relative and absolute strength Thursday in tech names such as Microsoft, Apple (AAPL:Nasdaq) , Broadcom (BRCM:Nasdaq) , and Google (GOOG:Nasdaq) . The group was "the rock of Gibraltar today ... that's a sign the buyers will come back to the Nasdaq first" after the oil-related selloff ends.

In response to a caller's question about how to profit from $60 oil, Cramer recommended ConocoPhillips (COP:NYSE) , EnCana (ECA:NYSE) and oil service companies Halliburton, Schlumberger (SLB:NYSE) , Baker Hughes (BHI:NYSE) and Smith International (SII:NYSE) . However, he later in the show recommended selling Chevron (CVX:NYSE) , fearing it'll have to "pay up" for Unocal (UCL:NYSE) .

In the Lightning Round, Cramer was upbeat about WellPoint (WLP:NYSE) , Quicksilver Resources (KWK:NYSE) , General Dynamics (GD:NYSE) , El Paso (EP:NYSE) , Millennium Pharmaceuticals (MLNM:Nasdaq) , Cimarex Energy (XEC:NYSE) and Disney (DIS:NYSE) .

The television host recommended selling Unova (UNA:NYSE) , Southern Peru Copper (PCU:NYSE) , IBM (IBM:NYSE) , Ameritrade (AMTD:Nasdaq) , Callaway Golf (ELY:NYSE) , Goodyear Tire (GT:NYSE) , Applied Digital Solutions (ADSX:Nasdaq) , Harris & Harris (TINY:Nasdaq) , International Securities Exchange (ISE:NYSE) , Manhattan Associates (MANH:NYSE) , and Kroger (KR:NYSE) .

Finally, Cramer agreed with Marketwatch.com columnist Herb Greenberg's negative stance on Jarden (JAH:NYSE) .

[Gizmo]

Looks like another AJC sell signal. LOL

AJC. Abby Joseph Cohen. In trader circles the joke is that when Abby comes out with a bullish forecast the market tanks within 3 days.
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Gizmo

[nodoodahs]

Of his mentions, I like ALL, COP, CVX, PCU. I am currently long CVX and PCU. May pick up COP. ALL too expensive and I already have two insurers, but I wouldn't mind having two major integrated oils.

PCU is up 1.68% today. Shorts have been piling on based on flawed (IMO - what do I know, maybe I'm wrong) analysis of copper prices, copper is being pretty sticky and I am getting more bullish by the day. Out on a limb: if PCU turns in a good earnings this quarter, watch the shorts eat their shorts and a big run up in a day. Heck, their 1Q results beat expectations and look at the last two months with this stock.

I take comfort that I don't lose money on a stock unless it goes bankrupt or I sell - neither of which is likely with PCU right now. After all the falling price has actually reduced my risk exposure on it.



I faithfully listen to the "lightning round" every day, and I LOVE to hear him "bear" my stocks! I actually get cautious when he "bulls" them!
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I haven’t seen a beatin’ like that since somebody stuck a banana in my pants and turned a monkey loose.

[Dubious]

Why am I having 2000 flashbacks?