Jim Cramer Stop Trading! Sirius Moonlight

Sirius (SIRI Quote) CEO Mel Karmazin is running out of time to make a deal for rival XM Satellite (XMSR Quote), Jim Cramer said on CNBC's Stop Trading! segment Tuesday.

Cramer has advocated that Sirius take advantage of the steep plunge in XM stock this summer to buy its struggling rival. But a 20% surge in XM stock off a Bear Stearns upgrade Tuesday morning had Cramer saying "the window is closing on Mel." Cramer said he believes XM shares, up $2.16 Tuesday at $13.40, could soon fetch $17. At that price the deal could be too rich, Cramer said.

Cramer said he likes natural gas producers EnCana (ECA Quote) and Devon (DVN Quote), because natural gas is trading above $7 and because of the heavy call-option buying in both companies.

"Natural gas stocks have done nothing" of late, Cramer said, but "people want in the patch," so shares in both Devon and EnCana could be poised for a rally.

Cramer said shares in drugmakers Merck (MRK Quote) and Pfizer (PFE Quote) are likely to continue to run higher. "Merck is back to being St. Merck," Cramer said, referring to the stock's long rise through the 1990s. "You can put weights on" Merck and Pfizer and they'd still soar, he said.

Cramer said Wachovia's (WB Quote) dividend increase suggests that a bank rally could have legs, too. He said that while previous tightening cycles have resulted in bank dividend cuts and worse, the big banks this time around have figured out how to make more money from fees, a more stable business. Credit losses have moderated too, Cramer said, adding that he believes the bank index, the BKX, could rise from a recent 111 to a 52-week high of 115.

Cramer also questioned the rationale behind the huge short interest in Borders (BGP Quote) and said the sale of a headquarters at CA (CA Quote) completes new management's turnaround story there.