Cramer's Wall St. Confidential: Oil Might Be Well

All things oil are hurting, but don't eschew the stocks in the sector.

Oil prices are tumbling, BP (BP Quote) has reported bad production numbers, and Marathon Oil (MRO Quote) has been negative, but Jim Cramer said on TheStreet.com TV's Wall Street Confidential video Tuesday that he believes people should buy oil stocks on the way down here.

"Oil has come down a lot and the stocks are pretty much in free fall," he told Aaron Task, the host of Wall Street Confidential. "I like to buy a stock in freefall if you have some underpinnings."

Recently, General Electric (GE Quote) bought an oil service company, which Cramer believes is "big" for the company, and it sold its plastics division, which was a giant consumer of energy.

When a company like GE decides the oil group is selling cheaply, Cramer said he believes people are throwing away these companies because they can't take the pain. However, he said he wouldn't cut and run here.

In fact, Cramer said he just bought some Transocean (RIG Quote) shares for his charitable trust, Action Alerts PLUS. He stressed that people should view oil stocks as investments, not trades.

When Cramer sees a group in free fall, he takes a look to see how low a stock like Halliburton (HAL Quote), which he also owns, can go. It could go to $23 or $24, Cramer said, which is where he would double up his position. Halliburton was recently trading around $28.