Spelling Relief for the Drug Group

Cramer sees some good trading ahead for the pharmaceuticals after last night's State of the Union address.
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That speech is what people sold the drugs for? That's the reason why this group has been hammered -- because Clinton was going to come down hard in the State of the Union address against pharmaceutical profits?

Wrong!

So now we get the big relief rally in the group, I guess. So who did the best in the quarterly drug sweepstakes? Amazingly, it is hard to pick among the winners because there were so many, which is why we own calls on the

drug index

, as opposed to individual stocks. But the independents, the ones not involved in merger talks, seem like the best bets.

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Merck

(MRK) - Get Report

,

Lilly

(LLY) - Get Report

and

Bristol-Myers

(BMY) - Get Report

all reported strong quarters, with only Lilly having any controversy about its earnings owing to some accounting issues involving stocking of drugs.

I thought Bristol did a great job, although some people are worried about Vanlev

not

being the blockbuster Bristol-Myers is looking for. Merck is still St. Merck in my book, doing everything right.

Ultimately, do people stay with this group? I don't think so. In this growth-obsessed tape, the biotechs have much more traction than the traditionals.

But I smell a good trade.

James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund was long DRG calls. His fund often buys and sells securities that are the subject of his columns, both before and after the columns are published, and the positions that his fund takes may change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to comment on his column at

jjcletters@thestreet.com.