If You Like Steel, Stay on Your Toes

Here's the problem. Steel. What do you do with this group? It is ramping every day, jam-packed with momentum investors. But if the economy softens, everyone in this trade will flee so fast that you will have nothing. You will lose a fortune.

In the meantime, you risk it to make 5%. You almost have to if you are a trader.

An investor?

I don't know -- do you want to buy Nucor (NUE - commentary - Cramer's Take) or Steel Dynamics (STLD - commentary - Cramer's Take) at their 52-week high? You want to bet that US Steel (X - commentary - Cramer's Take) preannounces to the upside? Or don't you fear that we'll go into a recession and you will be thinking, "What the heck did I buy a steel company for going into a recession? What an idiot I am!"

I know we are oversold. I am recommending playing the bounce. But for who? For only the most nimble.

Yet here's the real rub. The time to buy these was really Monday. You are coming in after the oversold condition was instantly alleviated in these names.

How about this analogy? You aren't coming in on quicksand if you buy Nucor, you are coming in on a landfill.

That's too dangerous for most.

But it will hold for the trade.

At the time of publication, Cramer had no positions in the stocks mentioned.

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