Be a Believer: Cramer's 'Mad Money' Recap (Wednesday 1/22/20)

Jim Cramer is paring back on some high-fliers, but he still believes in this bull and the stalwart stocks that support it.
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While some investors fear the market is about to crash like after 1999's party (Prince), Jim Cramer told his Mad Money viewers Wednesday that he's still a believer (Monkees) and couldn't leave this market if he tried.

Cramer reminded viewers that discipline always trumps conviction, which is why he's taking profits in some of his biggest winners for his charitable trust, Action Alerts PLUS. Just a few months ago, Apple (AAPL) - Get Report traded for $183 a share. Today, the stock crossed $317. It would be foolish not to take a little off the table, Cramer said, even though the company is likely to post an upside surprise this quarter. 

There are other stocks to love in this market. Cramer was bullish on Netflix (NFLX) - Get Report, despite the stock's 3.5% decline Wednesday. While some posit the company's best days are behind it, Cramer felt the stock's valuation was reasonable given its opportunity globally. He was also bullish on names like IBM (IBM) - Get Report, which trades for just 10 times earnings with a 4.5% dividend yield, and Broadcom (AVGO) - Get Report, which continues to see strong orders for cell phones. 

Is the market likely to crash like 1999? Cramer said he's not entirely sure, which is why it's prudent to take some profits while continuing to invest in best of breed companies trading at reasonable valuations.

Cramer and the AAP team are looking at everything from earnings and tariffs to the Federal Reserve. Find out what they're telling their investment club members and get in on the conversation with a free trial subscription to Action Alerts Plus.

Outlook for Oil

In a special interview, Cramer spoke with Rusty Braziel, president of RBN Energy, the energy markets data and analysis company, for a read on the oil market and the recent stand-off with Iran. 

Braziel said with the U.S. now producing 13 million barrels of oil a day and OPEC reducing output, it would take a serious and prolonged disruption in oil supplies to significantly move oil prices. Iran simply doesn't have the clout to do that on its own. 

When asked about the outlook for oil, Braziel said oil prices are likely to continue the range they've been in for the past several years. U.S. production will grow again this year, he said, but not as fast as last year. 

Turning to the topic of plummeting natural gas prices, Braziel noted that over half of all natural gas production comes in conjunction with oil and other products, so only those that are exclusively gas producers will be hurt by natural gas prices, which haven't seen these lows since 1999. 

Finally, when asked whether it's possible for fossil-fuel companies to be "green," Braziel said they can become "greener," but for those producers in the Permian Basin without access to pipelines, flaring off excess gas is the only option they have.

Watch: Trader Jon Najarian hosts discussions on energy, metals, forex and equity futures opportunities.

On Real Money, Cramer keys in on the companies and CEOs he knows best. Get more of his insights with a free trial subscription to Real Money.

Coronavirus and the Travel Sector

How should we be investing, given the current outbreak and spread of the coronavirus from China? Cramer took a look at past disease outbreaks to find out. He examined the SARS outbreak of 2003 and the Ebola virus outbreak of 2014, looking for answers.

In 2003, the SARS outbreak -- also a coronavirus that spread to humans starting in southern China in 2002 -- lasted for about eight months, Cramer noted. During that period, the S&P 500 dipped 15%, but in the months that followed, it rallied over 41%. In 2014, the S&P saw a 10% plunge, only to snap back a month later. In both cases, Cramer said the smart money avoided the industries directly affected by the viruses. 

Investors must avoid the airlines and hotels, Cramer said, along with casinos with exposure to China like Las Vegas Sands (LVS) - Get Report, Wynn Resorts (WYNN) - Get Report and MGM Resorts (MGM) - Get Report. He would also steer clear of the cruise lines and any tourist-dependent retailers until this current coronavirus outbreak is contained.

Off the Charts: Medical Device Makers

In the "Off The Charts" segment, Cramer checked in with colleague Bob Lang over the charts of three of the top medical device makers to see if their stocks can continue to rise.

Lang first looked at a daily chart of InMode (INMD) - Get Report and said he liked what he saw. Shares are up 75% in recent months, but have been consolidating their gains since November. The MACD momentum indicator shows a bullish crossover, signaling that consolidation may now be over. Shares have already spiked $9 since that crossover. 

Lang next looked at medical robotics maker Intuitive Surgical (ISRG) - Get Report and also liked what those charts were telling him. Not only are shares making patterns of higher highs on strong volume, the Ichimoku cloud signals the rally is expanding. 

Finally, Lang examined the daily chart of Bruker (BRKR) - Get Report, the medical analytics and diagnostics company. He liked this stock's upward trend on strong volume and said the floor of support at $51 a share is holding nicely. 

Cramer said he'd be a buyer of all three of these names on any market weakness created by the coronavirus outbreak.

Tesla's Acceleration

In his "No-Huddle Offense" segment, Cramer dove into the stock to Tesla (TSLA) - Get Report to figure out what's behind the stock's $150 move in just the past few weeks. The word on the street says that it's all just one big short squeeze, but Cramer said with 18% of Tesla's shares currently shorted, that would explain some, but not all, of this remarkable rally. 

The fact is that when it comes to electric cars, none of them have seen any real demand except for Tesla. None of the other automakers are anywhere near catching up to Tesla's battery technology or its cult-like following, Cramer noted. Add to that the company's battery and solar business, which fits in perfectly with a renewed focus on climate change, and Cramer said Tesla could be on the verge of an earnings breakout.

Lightning Round

Here's what Jim Cramer had to say about some of the stocks that callers offered up during the Mad Money Lightning Round Wednesday evening: 

Six Flags (SIX) - Get Report: "I didn't like that quarter at all. Its good story has turned bad." 

Chimera Investment (CIM) - Get Report: "This one is working but I don't understand what they own, so I can't recommend it." 

Danaher (DHR) - Get Report: "This one just continues to rally and it's not done. Stay long." 

Energy Transfer (ET) - Get Report: "This one has a good yield, but no growth so I'm saying no." 

Brookfield Asset Management (BAM) - Get Report: "This one is a good one." 

L Brands (LB) - Get Report: "I don't recommend a stock for a takeover if the earnings are bad and these are bad."

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At the time of publication, Cramer's Action Alerts PLUS had a position in AAPL.