Jim Cramer's 'Mad Money' Recap: Where Are the Market Leaders?
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NEW YORK (TheStreet) -- When the fast-growing technology stocks are leading the markets, things get tricky, Jim Cramer told his Mad Money viewers Tuesday. The market always looks for leaders to follow, Cramer added, but technology tends to lead an army of one.
That's not the case when the transports are in charge. With increased spending comes increased commerce and shipping, and that's great news for a whole host of stocks in our economy. Unfortunately, the transports aren't faring that well at the moment, especially the rails, which are suffering from lower coal and oil shipments.
The banks are typically good market leaders because more lending also equals more investment and more growth. But here again, the financials are also on hold, awaiting the Federal Reserve's next move.
And then there's tech. What's good for tech is often not good for other companies. Today's strong move in Netflix (NFLX) - Get Report is likely bad news for cable and media companies. Likewise with today's 2% rally in Google (GOOGL) - Get Report, a stock Cramer owns for his charitable trust, Action Alerts PLUS. A successful Google often leaves other advertisers and media companies in ruins.
That's why when the tech stocks are leading the markets, there aren't many followers.
Off the Charts
In the "Off The Charts" segment, Cramer went head to head with colleague Tim Collins over the chart of Twitter (TWTR) - Get Report, the Action Alerts PLUS holding that rallied over 6% in today's session.
Looking at a daily chart of Twitter, Collins noted that the stock has been a wild trader, a roller coaster with large gaps higher and lower as it trades in a channel between $45 and $50 a share. But today's breakout above $50 could be the start of a larger trend, as both the RSI momentum indicator and the MACD oscillator indicating bullish conditions.
Turning to a longer-term weekly chart of Twitter, Collins saw a classic wedge formation, a pattern that ends with either a strong move higher or a strong move lower. To determine which, Collins also called out a reverse head-and-shoulders pattern, indicating the direction for Twitter is likely higher.
Collins felt that if Twitter can hold above $50 a share for two weeks, then it could end the year at $66.50 a share. Cramer agreed with that sentiment, saying this company may finally be getting its act together and the market may finally be noticing.
Cramer's Takeaways
Some stocks just drive Wall Street nuts, defying the conventional wisdom and doing well even when the analysts say they shouldn't. That was Cramer's takeaway from the most recent quarters from 3M (MMM) - Get Report, Honeywell (HON) - Get Report and Boeing (BA) - Get Report.
After speaking to 3M's CEO just last night, Cramer found it easy to see why this company was able to deliver 6% organic growth. The company continually strives to meet its customers unmet needs and a full third of their products today didn't even exist five years ago.
In the case of Boeing, airlines just want their fuel-efficient planes. Even with oil prices at multi-year lows, using less fuel means higher margins for the airlines and more planes carry more passengers, plain and simple.
Then there's Honeywell, whose CEO happens to be Cramer's next-door neighbor. Honeywell also continues to innovate at all levels, and all three companies offer superior leadership, along with big dividends and stock repurchase programs to reward shareholders.
Executive Decision: Susan Salka
For his "Executive Decision" segment, Cramer spoke with Susan Salka, president and CEO of AMN Healthcare (AHS) , the health care staffing company that's up 18% for the year and 51% since Cramer last checked in just seven months ago.
Salka started off reflecting on AMN's 30-year anniversary by noting that after a modest beginning, AMN is now our country's largest health care staffing company and it's continuing to grow into workforce solution systems.
Salka said AMN continues to see great momentum in all of its businesses from nursing to physicians to physical and occupational therapists. She noted the strength stems from both an aging population and millions of Americans gaining access to health care for the first time.
AMN is also on the cutting edge of technology, with the largest database of qualified talent and new vendor management systems to help health care professionals manage their businesses more efficiently.
Cramer continued his support for AMN.
Lightning Round
In the Lightning Round, Cramer was bullish on La Quinta (LQ) , Radware (RDWR) - Get Report, Activision Blizzard (ATVI) - Get Report, Take-Two Interactive (TTWO) - Get Report, Visa (V) - Get Report, Akorn (AKRX) - Get Report and Union Pacific (UNP) - Get Report.
Executive Decision: Michael Small
In his second "Executive Decision" segment, Cramer sat down with Michael Small, president and CEO of Gogo (GOGO) - Get Report, the in-flight Wi-Fi provider with shares up 18% so far in 2015.
Small said that Gogo remains committed to bringing more bandwidth to the skies. As that happens, that bandwidth will be used for more and more things. Ultimately, Small sees Gogo potentially making more money by connecting the plane and its crew to the Internet than it does by connecting passengers.
As Gogo begins to deploy its next generation of air-to-satellite systems on a global scale, Small said his company's services could be used for real-time predictive maintenance on aircraft as well as helping to find out what happened when things go wrong and for finding downed aircraft a lot faster.
When asked why planes don't already have real-time tracking and location technology, Small said getting connectivity in the air is a challenging problem. Gogo solved it in the U.S. with air to ground services and now aims to do the same globally with satellite systems.
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At the time of publication, Cramer's Action Alerts PLUS had a position in GOOGL and TWTR.