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The Russell 2000 index is the key to this year's trades, he told viewers of his "Mad Money" TV show Thursday.

When a company gets added to the index, the biggest advantage is that the stock gets a lot more attention and promotion, Cramer said.

Every year, the Russell indexes (not indices), he explained, need to be rebalanced because of certain stipulations the indexes have. The annual rebalancing of the Russell 2000 index, which is made up of 2000 small-cap stocks, will take place in June this year.

To be eligible for the Russell, which makes up its own rules, a stock must have a market capitalization of $233 million to $3 billion, trade on a major exchange and trade at more than $1, among other conditions, Cramer said.

On June 22, the Russell 2000 will be reconstituted, and all companies that don't meet the criteria will be "purged and replaced," Cramer said. "The additions and deletions are based on stock prices as of today's close."

Cramer said he's here to try to predict which stocks will join the index and thus rally. The Russell rebalance, he said, is a "great" trade. It is one of the few events in the year that causes certain stocks to go up.

A great example of the effects of this process, he said, is what happened with

Jones Soda



Last year at this time, Jones had one analyst covering it; the company got into the Russell index, and now there are five analysts.

Additionally last year, a total of 228 stocks were added to the Russell 2000, out of which 111 went higher and 98 went lower. Even though this might seem like 50-50 odds, the stocks that went up moved much more than those that went down, Cramer said.

In fact, the top five performers of the Russell index last year --

Sigma Designs



Matrix Service

(MTRX) - Get Matrix Service Company Report


Bradley Pharmaceuticals


, Jones Soda and

Advanced Magnetics

(AMAG) - Get AMAG Pharmaceuticals, Inc. Report

-- are all up more than 100%, Cramer said, and all came from different sectors.

The rebalance has to happen, Cramer said. Don't read about this in the papers after the fact.

Three for All

Cramer said he has three favorite stocks that he believes are likely to get added to the Russell 2000.

Even if the stocks aren't added to the index, Cramer likes these plays. But remember, Cramer reminded viewers, to not trade after hours, to use limit orders and to buy these picks incrementally.

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The first of Cramer's Russell 2000 stocks is

Coleman Cable


, a company that makes electrical wire and cable, he said.

Coleman is now big enough to be included in the index and only has one analyst covering it, Cramer said. However, this should change if it joins the Russell 2000. He said he could even see a company such as

General Cable


buying it.

Cramer's next "golden nugget," he said, is

FCStone Group


, which has two analysts covering it in addition to overseas exposure.

His third and final Russell rebalance stock is

Great Lakes Dredge & Dock

(GLDD) - Get Great Lakes Dredge & Dock Corporation Report

. The thing Cramer said he especially loves about this stock is that it is protected by the Jones Act, which prevents foreign competition in the U.S. market.

Plus, it has a lot of foreign business, he said.

Sell Block

In his "Sell Block" segment, Cramer said that

Charter Communications

(CHTR) - Get Charter Communications, Inc. Class A Report



(AAPL) - Get Apple Inc. (AAPL) Report

are each up 41% since he recommended them.

Starting with Charter, Cramer said it's time to take most or all of this stock off the table. Though Charter was always more expensive than


(CMCSA) - Get Comcast Corporation Class A Report

, even though Comcast was the better company, Cramer said he liked it because it was refinancing its debt at better levels.

Now he wants people to declare victory on the stock

Apple, he said, "is more difficult." Cramer said he has to put his stock in the Sell Block, at least a little bit. "This is a stock that needs to be traded now."

In general when there is a stock that is up 41% in six months, market players should not be greedy -- otherwise they could get burned, he said. "Never be afraid to take something off the table if you're up 41%."

On, Cramer said, he advised people to sell Apple into the launch of its iPhone product because expectations have gotten too high for the product.

Second, it is a possibility that the iPhone is not the next great thing, he added. Also, people should keep in mind what happened when the product was first introduced. On the day it was unveiled and the day after, Apple plummeted, Cramer said.

Therefore, why not declare victory on at least some of your position? he asked. Cramer recommended schnitzeling some and buying it back after the launch and after Apple inevitably goes down.

Meanwhile, he suggested not selling


(DELL) - Get Dell Technologies Inc Class C Report



TheStreet Recommends


, which he owns for his charitable trust,

Action Alerts PLUS.

Even though Sears had a horrible quarter and isn't executing or even buying stock back to create a cushion, Cramer said he's giving the benefit of the doubt to Eddie Lampert.

"I'm not happy with it, but I'm not worried about it either," he said about Sears.

In his "Mad Mail" segment, Cramer told a viewer that


(HAL) - Get Halliburton Company (HAL) Report

, which he owns for his charitable trust, is going down because it is levered to domestic drilling and natural gas, which people are "suspicious" of.

"To me it should be bought because it's so darn cheap," Cramer said, adding that he likes it on a valuation basis.

Lightning Round

Cramer was bullish on

Global Sources



Duke Energy

(DUK) - Get Duke Energy Corporation (DUK) Report



(EXC) - Get Exelon Corporation Report


Consolidated Edison

(ED) - Get Consolidated Edison, Inc. Report


Level 3 Communications



Briggs & Stratton

(BGG) - Get Briggs & Stratton Corporation Report



(AIR) - Get AAR CORP. Report


BE Aerospace



Dollar Tree Stores

(DLTR) - Get Dollar Tree, Inc. Report






(NUE) - Get Nucor Corporation Report





Cramer was bearish on

Archer Daniels Midland

(ADM) - Get Archer-Daniels-Midland Company Report



(IDT) - Get IDT Corporation Class B Report


FactSet Research Systems

(FDS) - Get FactSet Research Systems Inc. Report





For more of Cramer's insights during the Lightning Round, click here


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At the time of publication, Cramer was long Sears Holdings and Halliburton.

Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for, Inc., and CNBC, and a director and co-founder of All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of or its affiliates, or CNBC, NBC UNIVERSAL or their parent company or affiliates. Mr. Cramer's opinions are based upon information he considers to be reliable, but neither, nor CNBC, nor either of their affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. Mr. Cramer's statements are based on his opinions at the time statements are made, and are subject to change without notice. No part of Mr. Cramer's compensation from CNBC or is related to the specific opinions expressed by him on "Mad Money."

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