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TheStreet Open House

Cramer's 'Mad Money' Recap: More Selling to Come

Reddy also talked about Noodles' menu, which includes complex dishes, ones not found at any other fast-casual chain. He said the menu offers lots of choices, noting that "we make things just like in your kitchen at home." Noodles has many healthy alternatives under 500 calories.

When asked about competition, Reddy characterized Noodles as a "category of one" given its wide variety of foods all under one roof. No one else is doing what Noodles does, he continued.

Cramer said that while Noodles is pricey, trading at 77 times earnings with a 21% growth rate, he'd be a buyer of the stock if the market continues to send shares lower.

Off the Charts

In the "Off The Charts" segment, Cramer went head to head with colleague Bob Lang over the chart of Netflix (NFLX), which now trades at 84 times next year's earnings. This "cult" phenomenon of a stock continues to blow past its 300% rise for the year.

Lang noted that a daily chart of Netflix shows the stock just recently breaking through its ceiling of resistance, creating a new floor at $270 a share. He said this move was made on strong volume, and volume always acts as a polygraph, telling technicians whether a move is lying or not. Additionally, Netflix shows strong buying on every dip.

Lang also pointed out both the MACD momentum indicator and the Williams' oscillator are signaling strong buy signals. In fact, Lang said that looking at a weekly chart, the Williams' oscillator shows Netflix in a strong overbought condition for all of 2013 as investors simply cannot get enough of this stock.

But even more bullish on the weekly chart is this stock's cup-and-handle formation that goes all the way back to 2011. If all of that weren't enough, Netflix just saw its 50-day moving average cross over its 200-day average, making a "golden cross," one of the most bullish technical indicators out there.

Cramer said that while some investors might be squeamish about investing in such a red-hot stock, he's learned the hard way that betting against a cult stock like Netflix is a recipe for disaster.

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