'RealMoney' Radio Recap: Oil Stocks Gushing

"You absolutely have to be buying oil stocks into this weakness," said James Cramer Wednesday on his "RealMoney" radio show.

Last week, Cramer said he saw mutual funds buying oil stocks into the end of the quarter to show the stocks on their books at quarter-end. This week, Cramer sees mutual funds selling oil stocks to lock in gains. But, he said, the earnings of smaller oil companies and integrated oil companies -- ones that also make plastic and chemicals -- are "only just beginning to be great."

Examples of companies Cramer would be buying into weakness include Valero Energy (VLO Quote), which he would look to buy around $100, Halliburton (HAL Quote), Schlumberger (SLB Quote), Occidental Petroleum (OXY Quote)and EnCana (ECA Quote).

Cramer would avoid "big oil" stocks such as BP (BP Quote), Royal Dutch Petroleum (RD Quote), Exxon Mobil (XOM Quote) and Chevron (CVX Quote).

Whereas the weakness in oil stocks is a buying opportunity, the weakness in homebuilders' stocks is not. The homebuilders "are finished," said Cramer. Homebuilders' stocks can't seem to get out of their own way, he said.

Cramer believes the weakness in homebuilding stocks is signaling weaker earnings ahead for the companies even though they have yet to experience a slowdown. With the Federal Reserve continuing to raise interest rates, though, and despite generally excellent management, Cramer believes the homebuilders' businesses will go south before too long.

"I don't like the homebuilders anymore," said Cramer. You should sell the stocks on any rally or even if they don't rally, said Cramer.

Picks and Pans

In his weekly "Am I Diversified?" segment, Cramer said these things about stocks in listeners' portfolios:

OSI Pharmaceuticals (OSIP Quote): The stock is very controversial, and Cramer doesn't like the company's planned acquisition of Eyetech Pharmaceuticals (EYET Quote). However, OSIP is an interesting speculation, but Cramer prefers not to speculate in biotech stocks.

UnitedHealth Group (UNH Quote): "One of my absolute favorite health care maintenance companies."