Was last week's rally a mirage?
That's the question traders need to ask themselves today, Jim Cramer said on TheStreet.com TV's Wall Street Confidential
Web video Monday, as some big-name stocks might have gotten a boost courtesy of some options-expiration action.
To get at the truth, traders need to focus on five companies that reported disappointing earnings last week, but then started to rise at the end, Cramer said. If these stocks begin to go down, "We will get a sense that a non-futures-related market may not be as robust as last week and we could be vulnerable."
, one of the five stocks he advised people to watch, "reported a number that was fine, but it didn't give a good sense of the
market," he said. The fact that Nike was able to start turning around at the end of the week tells Cramer that the "weaker sisters" should also go higher.
Further, contrary to an article published in
last weekend, Cramer said he doesn't believe it would be a mistake for
to go up against Nike. "I think that these are really big companies, Nike and Adidas," he said. "Reebok has so taken its eye off the ball that it creates the vacuum for Under Armour."
Moving on, Cramer said
, which was upgraded today, "is one of those stocks that won't rally until we're back into the season where tech is good." Tech, said Cramer, is "very much the wrong place to be."
gave a very negative outlook, he continued. "I think FedEx is more linked to overall economic activity than to the sectors that have been really terrific, like aerospace, machinery and agriculture," Cramer said. "I look at that one like a sense that maybe people are suspending their negativity, and it does seem to be headed higher."
The fourth stock,
Illinois Tool Works
, didn't report a good number, "but the machinery sector is so on fire that the
are taking this cohort up, too," he said.
Investors should also keep an eye on
, which he owns for his charitable trust,
Action Alerts PLUS, Cramer said.
Even though UnitedHealth "looked really bad," the company is setting up for a very good second half. However, it does have "some execution issues," which is unusual for the company, Cramer said. It is getting back on track but it's taking a long time, he said.
At the time of publication, Cramer was long UnitedHealth.
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