Cramer's 'Mad Money' Recap: Tech Tonic - TheStreet

Cramer's 'Mad Money' Recap: Tech Tonic

The short-term momentum toward tech stocks has little to do with fundamentals, Cramer says.
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Jim Cramer explored the intricacies of market momentum on a shortened, midday episode of his

Mad Money

TV show Tuesday.

He said that much of the recent market action has to do with momentum and not the fundamentals. This means that some hard-and-fast rules of investing may have to be temporarily suspended until this move is over, he said.

Cramer said that one such hard-and-fast rule is to sell tech stocks in February and not look back until the fall. In fact, in 16 of the past 17 years, this rule has held true, he said.

However, the recent market momentum is clearly in the tech stocks' favor, with companies like

Intel

(INTC) - Get Report

,

Microsoft

(MSFT) - Get Report

,

Google

(GOOG) - Get Report

,

Apple

(AAPL) - Get Report

,

Research In Motion

(RIMM)

,

Amazon.com

(AMZN) - Get Report

and even

Qualcomm

(QCOM) - Get Report

, which he also chose for his

Action Alerts PLUS

portfolio, and

Applied Materials

(AMAT) - Get Report

either trending higher or making positive comments about their outlooks.

Cramer expects to see continued sector rotation out of the oil and natural gas sectors and into these seemingly inflated tech names.

Cramer also reiterated his price target for oil at $110 a barrel or $3.50 a gallon for gasoline. While he said it's tempting to consider $80 to $90 for a barrel of oil, the real demand, he feels, continues to be at the $110 level.

Cramer: Auction-Rate Debt Won't Break Banks

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A Winning Recipe

In his new "Executive Decision" segment, Cramer talked with

General Mills

(GIS) - Get Report

president and CEO Ken Powell about the company's stronger-than-expected earnings despite rising input costs.

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Powell noted that General Mills first predicted raw cost inflation in 2003 and 2004, when the company began taking steps to combat them. He said that the company has an intensive, holistic approach to eliminate waste and cut costs.

Powell also cited strong international growth as a key to the company's continued success. With 25% of the company's sales now overseas, Powell sees continued growth in China and in other overseas markets.

Finally, Powell said that new products and innovation are driving his company forward. He noted the company's "Fiber One" brand as one that's doing exceptionally well in an otherwise difficult market.

Outrage of the Day

In this segment, Cramer called out

Fortress Investment Group

(FIG)

chairman and CEO Wes Edens for his $300 million payment to CIO Adam Levinson while the company posted a $55.6 million loss for the quarter with revenues falling 30%.

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Cramer also directed viewers to the recent action in

Great Atlantic & Pacific

(GAP)

, which also posted a horrible quarter, but is now seeing strong insider buying.

Finally, Cramer said the time is now right to buy

Fluor

(FLR) - Get Report

. He said the stock has fallen way to far in relation to the price of oil and natural gas. He's also bullish on

Nabors Industries

(NBR) - Get Report

and

Halliburton

(HAL) - Get Report

.

Cramer also sees strength in the defense contractors ahead of the Republican Convention. He recommended

General Dynamics

(GD) - Get Report

,

L-3 Communications

(LLL) - Get Report

,

Northrop Grumman

(NOC) - Get Report

and

Raytheon

(RTN) - Get Report

as great short-term plays.

Want more Cramer? Check out Jim's rules and commandments for investing by

clicking here

.

Read more of Cramer's Mad Money Lightning Round insights

.

At the time of publication, Cramer was long Qualcomm.

Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for TheStreet.com, Inc., and CNBC, and a director and co-founder of TheStreet.com. All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of TheStreet.com 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 TheStreet.com, 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 TheStreet.com is related to the specific opinions expressed by him on "Mad Money."

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