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RealMoney Radio Mailbag: What Goes Up, Must Come Down

A listener learns why good earnings may not push high-flying Allegheny Technologies higher.

Editor's note: The following are questions received from listeners of "RealMoney Radio." To send Cramer a question about topics from his radio show, click here. Listen to Cramer's latest radio show by clicking here.

Do you believe that Allegheny Technologies (ATI) - Get Free Report will report good earnings this week?-- David from Rhode Island

Jim Cramer

: I believe that Allegheny will have a good first quarter, but unless the report and guidance are spectacular, I believe the stock will sell off.

The stock is up more than double so far this year, and up more than 20% this month, so expectations are very high. It makes sense to take profits ahead of the number because the stock is being driven by pure momentum and the risk-reward is not favorable.

Jim, is it good for tech companies to cut the prices on their products?-- Freddie from California

Jim Cramer

: As long as a company can maintain or boost margins, price cuts can be a very good thing because increased demand could more than make up for falling unit prices. Just look at the cell phone industry. Prices have been falling steadily for the past 20 years, and profits for the phone makers have never been better.

If a company cuts prices and margins fall, then it is a negative.

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